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Built by Fulton Hogan on behalf of Waka Kotahi New Zealand Transport Agency, the $15 million job was acknowledged at a ribbon cutting ceremony in Edendale.
Invercargill Labour list MP Dr Liz Craig, who opened the event, said it would benefit commuters and the wider Edendale community alike.
"It will increase safety for Edendale residents by shifting State Highway 1 traffic away from the town, the primary school and the Fonterra dairy plant.
"The realignment will also bring considerable environmental benefits, with less traffic noise and fewer vehicle emissions where people live."
The project included a 2.6km highway around Edendale and the local Fonterra plant, a four-legged roundabout, two additional road connections, a dedicated passing lane, and a stock and light farm vehicle underpass.
In addition to the restructure, 35,000 plants, mostly natives, had been planted as part of the project, Dr Craig said.
Stormwater was also being treated and released using soak-pits and a large basin to manage runoff after heavy rainfall.
NZ Transport Agency project manager Jason Forbes said the 18 month-long transformation replaced the tight curves, intersections and rail crossings of the former highway route to improve traffic and road safety.
"Removing all those obstacles was the main thing and opening up access to the wider Southland region."
Fulton Hogan South Island general manager Craig Stewart said it had been a huge success story through collective effort and "pretty special".
Fonterra lower South Island general manager Richard Gray said the separate entrance to the plant, off the roundabout, would improve tanker fleet efficiency.
"Importantly, it’s going to benefit the community taking a lot of the heavy vehicles away from the primary school."
Ngai Tahu Kaumatua representative Taree Bradshaw said he could not get over how beautiful the road was.
"You fellas really set the bar for what roads should be like here down South."