"Roundabouts naturally slow traffic and reduce the chance of head on or side impact crashes, reducing the risk of death or serious injury if someone makes a mistake and crashes.
"Our data shows that changing a T-intersection to a roundabout reduces death and serious injury crashes by 90 per cent, while the total number of crashes reduces between 25 to 80 per cent."
The cost of the project including preliminary works and property purchase will be $7.5 million.
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The Te Puna Memorial Hall will be deconstructed later this year to make way for the new roundabout.
The roundabout was part of a $12 million package of works that had been rolled out to boost safety on State Highway 2 while a long-term plan was finalised.
"The majority of crashes on this road are head-on and run off road," Mr Young said.
"While we cannot necessarily prevent someone making a mistake and having a crash, we can create a more forgiving road environment so that people don't pay for a mistake with their lives."
More than $5 million worth of safety improvements had been carried out on the road between Bethlehem and Waihi during the past two years including 10km of guard rail.