Rotorua National MP Todd McClay said the development would ease congestion and make Rotorua more appealing.
"Our businesses will be better connected to the Port of Tauranga and it will free up land to build more homes."
Mr McClay said the road would improve safety along State Highway 30 and also included upgraded walking and cycling facilities.
#WATCH: Bill English to make an announcement.
Posted by Rotorua Daily Post on Friday, 15 September 2017
Rotorua Labour candidate Ben Sandford agreed with the plan to develop, but said this was not a new problem.
"This has been a problem for a long time and National have had nine years to fix it."
Mr Sandford said Labour's funding plan would make the development more possible.
"Rotorua Lakes Council have been planning on developing out towards the airport so it's important to get this done as quickly as possible."
Rotorua mayor Steve Chadwick, who is currently in Melbourne, said the need to upgrade Te Ngae Rd would remain whatever the election outcome was on Saturday.
"This has been something RLC had pushed for over the last three years since the designation was lifted. We had also been consistent wanting certainty of funding so the job could be done by 2020 including grade separation at the Lynmore roundabout."
Progress for the Te Ngae Rd upgrade was announced when the council voted for the removal of the Rotorua Eastern Arterial roading project designation in April of last year, which would have run through sensitive Maori land of Te Arawa hapu.
Maori Party co-leader and Waiariki MP Te Ururoa Flavell said a four-lane highway that linked Rotorua to the Western Bay of Plenty would undoubtedly bring economic benefits to the city and to Maori in particular.
"It is important that NZTA continue to korero with hapu and iwi it's their whenua fullstop and the basic premise of whenua Maori is retention."
The Maori contribution to the entire Bay of Plenty economy is estimated at 11 per cent of regional GDP - $1.1 billion a year with an asset base of $8.6 billion, he said.
"I would hope that the proposed highway would assist with growing the economy while at the same time ensuring that the rights and interests of hapu and iwi are protected."
Holmes Group managing director Ryan Holmes, who is developing Lynmore Junction on Te Ngae Rd where Motion Entertainment is located, believes the four-lane extension is a good thing.
"It gives more certainty to local land developers for building out there.
"It's probably not great for residential land as of right now, but once the extension is done and the congestion of traffic disappears it will make it easier for developers," Mr Holmes said.
Simon Anderson, chief executive of Realty Services, which operates Eves and Bayleys, said the completion of the road would bolster the real estate opportunities.
"Whenever transport is improved, the appeal lifts and there's a lot of commercial and industrial land out there as well as the potential for subdivisions."
National Transport Minister Simon Bridges said the announced plan would also bring tourism benefits.
"Te Ngae Rd supports a growing number of tourists travelling to Rotorua, making it increasingly important to connect people to key domestic and international markets."
Local residents commented on the Rotorua Daily Post Facebook page giving their thoughts on the announcement.
One person said "the road is completely adequate as it is. It would be cheaper to sort out incompetent driving".
While others said "about time" and " there needs to be four lanes to Ngongotaha and Owhata".
