The Government has announced a $24 million injection for Rotorua's transport network that will include major upgrades to Te Ngae Rd.
The roading package will see an upgrade to State Highway 30/Te Ngae Rd, a new roundabout at the Te Ngae and Tarawera Rd intersection, the four-laning of a section of Te Ngae Rd, and improved walking and cycling connections.
It also means the controversial Rotorua Eastern Arterial route through sensitive Maori land close to Lake Rotorua is "unlikely to be built, even in the long term".
Transport Minister Simon Bridges made the funding announcement in Rotorua this afternoon.
"The Government has been working closely with Rotorua Lakes Council to look at the best way to future-proof the city's transport network, resolve congestion issues and address challenges surrounding local road access," Mr Bridges said.
"Rotorua's eastern corridor has long been identified as the location for the majority of future residential and employment development in the city.
It is a key transport route and serves both an inter-regional and local function."
Rotorua MP Todd McClay said the roading package would help drive growth in Rotorua bringing the total transport investment for the city to $41m over the next 2-3 years.
"I'm pleased that today the Minister has announced a significant roading package that will solve a number of Rotorua's transport issues including reducing congestion in our busiest areas," Mr McClay said.
"By improving links between centres of production and ports or airports, we can improve our international competitiveness and achieve the strong and growing economy that supports more jobs and higher incomes."
Mr McClay said Rotorua's Eastern corridor remained an important link to the Port of Tauranga.
"For this reason NZTA had been asked to investigate supporting RLC's request for the removal of the designation for Eastern Arterial route to support economic development. In particular I have asked for community views on this issue," he said.
"I'll continue to work with Minister Bridges and the New Zealand Transport Agency to find the best option for Rotorua's long term transport network. This includes exploring the option of a new roundabout at the airport and consideration of an overpass at the Tarawera roundabout."
Mr Bridges said investigations carried out by the New Zealand Transport Agency (NZTA) under the Government's Accelerated Regional Roading Programme recommended the previously identified option of the Rotorua Eastern Arterial (REA) not be built, and is unlikely to be built even in the long term.
"For some time the REA was seen as the long-term solution but investigations have recommended upgrading State Highway 30/Te Ngae Rd to support growth and improve Rotorua's congestion issues.
"Nevertheless, the Government has asked the NZTA to take a further look into options for Rotorua's long term transport network and report back before any final decision is made on whether to lift the designation for the REA.
"Rotorua is a key connection point for road transport in the central and upper North Island, connecting industries such as tourism and forestry with the Port of Tauranga.
"This investment into Rotorua's transport network is designed to support economic growth and development, help ease congestion and improve road safety."
Preparation for the upgrades will get underway this year and work will be carried out over the next two to three years.
The work will be co-funded by the Government through the NZTA and Rotorua Lakes Council, and will include funding from the Urban Cycleways Fund with potential for further investment based on growth.
Rotorua mayor Steve Chadwick said the announcement was a great start to a long-term roading solution which will not only ease pressure on a busy road but also help the region's economic growth.
"We are delighted with this announcement. Congestion on Te Ngae Rd is a major problem for us and needs to be addressed," she said.
Mrs Chadwick said the council wanted to see the SH30 Rotorua eastern arterial designation lifted. It was first applied in the early 1960s.
"This historic injustice needs to be addressed for local iwi (Ngati Uenukukopako, Te Roro o te Rangi, Hurunga te Rangi) to allow them an opportunity to manage and develop that land.
"If this package of investment announced by the minister today leads to that, this is a very important principle decision for us as a council.
"There is no long term need for that road for the next 20-50 years.
"It is great to have the attention and now the financial support of the Crown," she said.
$24m roading improvements include:
An upgrade to State Highway 30/Te Ngae Rd
A new roundabout at the Te Ngae and Tarawera Rd intersection
Four-laning a section of Te Ngae Rd
Improved walking and cycling connections