Tauranga's long-awaited northern expressway has been given the green light as part of a record-breaking $521 million funding injection to improve safety and reduce traffic congestion between the city and Athenree.

Construction of the 6.8km Tauranga Northern Link bypassing Bethlehem and Te Puna will start in two years and was expected to open by 2022, Tauranga MP and Transport Minister Simon Bridges has announced.

Mr Bridges said no consideration had been given to tolling yet.

The funding package was the single biggest investment yet in a Western Bay roading corridor by the New Zealand Transport Agency and was described as "confidence boosting" by Tauranga Mayor Stuart Crosby.

Transport Minister Simon Bridges talks about the major roading project which will reduce traffic and improve the safety.

More than half of the money would be spent building the $286 million Northern Link between Route K and Loop Rd just north of Te Puna.

It would go under Cambridge Rd, a short distance east of the intersection with Moffat Rd, cross the Wairoa River on a new bridge and merge with the existing highway past the Te Puna shops.

The announcement has come as a huge relief to Te Puna residents who have witnessed a sharp growth in congestion along a road that was once called "horror highway" because of the number of fatal crashes.

"This is tremendous news," Mr Crosby told the Bay of Plenty Times Weekend.

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He said it came on the back of the $450 million spent to build the Tauranga Eastern Link from Baypark to Paengaroa.

"We were becoming a little concerned that the Northern Link kept on getting pushed out but because of congestion the agency's board has decided to move, and move quickly."

A further $150 million would be spent either widening the highway to four lanes or building a new highway from Te Puna to Omokoroa. Its timing would depend mainly on the pace of development in areas north of Te Puna, focused on Omokoroa and Katikati.

Mr Bridges said the business case to extend the Tauranga Northern Link to Omokoroa was expected to be finished within 10 years.

The $85 million earmarked to be spent on safety improvements would target high-risk areas on SH2 north of Te Puna, and starts this year.

It would include a series of intersection improvements, and median and side barriers. Significant safety hot spots included Katikati, although the NZTA was not in a position to say that the improvements would include a new road that bypassed the town. It was looking at all options for Katikati.

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Mr Bridges said daily traffic volumes on SH2 to Katikati had grown by 2500 vehicles in the last 10 years, with the growth set to continue.

The NZTA had an open mind about the design of the intersection with Omokoroa, with Mr Bridges' preferred solution an underpass or overpass.

Reducing traffic congestion was the other major driver. "As locals know, it is congested every single day now."

He said the package reflected the Bay's place in the incredible growth taking place in the golden triangle of New Zealand's economy - Auckland, Hamilton and Tauranga.

Jude Reyland, who lived off Te Puna Quarry Rd, welcomed the announcements, saying congestion had really worsened over recent months.

"Something definitely had to happen ... they needed to get their A into G."

It had resulted in growing concerns about the daily task of getting out on to the highway in order to drive to Tauranga. "It is often impossible in peak-hour traffic."

The family had lived in Munro Rd for 10 years and traffic was now much more dense, and not just at peak hours. Even Saturdays and Sundays saw a constant stream of traffic.

The big difference was in school holidays when traffic was definitely not as bad, she said.

Ms Reyland said her son now had to leave home half an hour earlier to get to water polo training in Tauranga, and her husband left for work at 6.35am instead of 7am.