Consultation has begun with the hundreds of affected residents following today's announcement of the preferred choice for the 4.5km Auckland motorway extension between Waterview and Mt Roskill.

The New Zealand Transport Agency said the $1.4 billion motorway/tunnel option would result in 365 properties knocked down, 200 more than the tunnel-only option dumped by the Government yesterday.

The preferred choice involves building the motorway under Great North Road and in a tunnel under New North Road and under Avondale Heights.

The motorway, known as the Waterview connection, will complete Auckland's Western Ring Route.

It has become a major issue in the Mt Albert by-election, which takes place on June 13.

NZTA chief executive Geoff Dangerfield told NZPA that affected householders were being contacted from today.

"Now we're at the point where we want to talk and engage with the community on this option. The new route directly affects 365 residential properties and we have already bought 126 of these properties," he said.

"We also want to talk to the community about the broad design of this option and its environmental impacts. We will gather their feedback as the board comes to make a final decision on this in August."

He added that the new road would have capacity for three lanes in each direction, with potential for further lanes to be added in the future.

"It uses the existing rail corridor in its southern section and avoids most of the other open space areas that are valued by this community."

He thought the road could be completed in about four years once the consent had gone through.

Transport Minister Steven Joyce said the motorway extension would cost $1.4 billion, about half the price of the previous Labour government's plan for a twin tunnel.

Waterview Primary School will not be affected any more than it would have been under Labour's tunnel proposal, he said.

"This is a cost-effective option but it's still important to note that this will be New Zealand's most expensive roading project every by a considerable margin," he said.

"There were no easy options here but I believe this proposal will go a long way towards easing the concerns of many, while being cost-effective for New Zealand."

NZTA chairman Brian Roche said the Mt Roskill extension will be opened on Friday, and the value of completing Waterview would be very significant.

"We have tried to balance all interests, recognising the imbalance the community is facing, and recognising that this has been on the drawing board for a number of years. We have a strong desire to work with the community to complete that.

"All options considered, including the twin tunnels, were going to be a challenge. The option we have decided to endorse is affordable and it can be funded.

"It has the least effect on the neighbourhoods and the parks. It creates a lot less community severance than some of the other options. And it avoids significant amenities currently enjoyed by the community. It avoids major impacts on Oakley Creek, and we recognise that as an important aspect of the community.

"It's about one billion dollars cheaper than the previous proposal and it can be built in less time," Mr Roche said.

The Labour Party said the decision showed "a staggering level of contempt" for Mt Albert residents.

Transport spokesman Darren Hughes said no effort had been made to protect the community and hundreds of people would be driven from their homes.

Mr Hughes said the Government was "cooking the books" to inflate the cost of Labour's twin tunnel plan.

"Labour's tunnel option was never going to cost more than $3 billion. It was going to cost $1.89 billion and the funding mechanisms were there to pay for it," he said.

"The Government is adding road works and finance justify bulldozing this road through."

The Employers and Manufacturers Union welcomed the choice.

"The motorway option selected is pretty damn good," said the association's chief executive Alasdair Thompson.

"Twin tunnels were never a long term solution and unaffordable in any case."

He said the estimated value to the country from completing the ring route was more than $830 million a year.