While the new seal is being laid, four speed bumps will be installed between Taharangi and Karenga Sts.
Work is due to start this month and be completed in late November, however, a good period of dry weather is needed to be able to properly construct the road, the council said.
Renewing Koutu Rd is part of the capital expenditure included in the 2017/2018 Annual Plan.
The council maintains more than 1000km of roads and 400km of footpaths in the Rotorua district.
To find out more about roading projects and this year's Annual Plan at www.rotorualakescouncil.nz.