Work on the Nuggets Rd sealing project started at the beginning of the week and is expected to continue until next year.
The project to seal the gravel road leading to the Nugget Point lighthouse was announced at the end of last year.
The construction contract was awarded to SouthRoads after the Clutha District Council received four tenders for the job.
SouthRoads offered a tender of $2.13million, about $570,000 lower than the $2.7million originally budgeted for the work.
The first phase of the work began on Tuesday.
Council communications co-ordinator Rachel Askew said the work would start from the car park at the end of Nuggets Rd.
The first stage will be completed throughout the winter months.
The car park will be sealed, guard rails installed on the road and rocks stabilised in the area.
The final stage of work, to widen the road and apply the chip seal, will be completed over summer.
Ms Askew said work is expected to be completed in March 2017.
The NZ Transport Agency confirmed it would contribute up to 59.69% of the budget and the council will cover the rest.
Nuggets Rd was identified as a key project to benefit Otago and funding was allocated as part of the Otago Transport Investment Programme.
The road is not expected to close for the sealing work but people should be aware there could be delays and be mindful of safety measures.
