The project will replace the former SH3 route through the Manawatū Gorge which was closed in 2017 from ongoing destabilised land encroaching onto the road.
Minister Twyford said the new highway across the Ruahine will reconnect Manawatū, Tararua District, Hawke's Bay and northern Wairarapa, as well as restore a vital link for locals, travellers and businesses across the North Island.
"This project is not just lines on paper; this is more than just a road.
"This year we are doing things differently.
"The symbolism of building a road on this land in partnership with the local iwi; together we can build not only a fantastic road, but good jobs and training opportunities for these communities."
He said working alongside mana whenua was about the importance of the natural world and the contribution of te ao Māori.
He acknowledged the Alliance and Waka Kotahi partnership with local iwi who are represented and deeply involved in the governance and operations of the project.
"Through having strong local partnerships and mandating good social outcomes, this project is setting a great example for other upcoming major infrastructure projects."
He continued that the $620 million funded by the Government of the 11.5km highway between Ashhurst and Woodville was a geometric feat.
"It will also help with the region's economic recovery.
"The project will create hundreds of jobs and has a target to employ more than 60 per cent local workers.
"This will have huge benefits for the region with their people being upskilled and getting money in their pockets when they need it most."
For those coming to work in the region, affordable homes will be built which will later be sold to locals.
The project will plant 46ha of native forest, rehabilitate 32km of streams, protect 48ha of existing forest and manage the pest control of 300ha of forest reserve.
The team is also working closely with iwi, stakeholders and local government to protect the environment as much as possible, Minister Twyford said.
Iwi signatory Mavis Mullins said the project was a treaty relationship in action.
Alliance chairman Ian Sloane said this was an opportunity to celebrate the beauty of the region.
The Alliance members are Waka Kotahi NZ Transport Agency, Fulton Hogan, HEB Construction, Aurecon and WSP.
Subject to consent approval, enabling works such as the creation of access tracks and water reservoirs will begin in October 2020, with main construction beginning in January 2021.