The upgrade includes traffic lights at the intersections of Ruakura Lane/Ruakura Rd and Ruakura Rd/Knighton Rd as well as shared paths and dedicated cycleways.
Capital projects manager Chris Barton said as urban development progresses in the area the road is no longer fit for purpose.
"Ruakura Rd has deep ditches beside the traffic lanes, uncontrolled intersections and limited kerbing, lighting and footpaths. So, these roading improvements are needed now to improve the safety for all road users including pedestrians and cyclists."
Council data shows on average 21,000 cars travel Ruakura Rd each day from Monday to Friday.
Meanwhile, work on a key transport connection project supporting the development of the Ruakura Superhub is well under way.
Together the two transport projects will help provide a connected city between Ruakura, the University of Waikato, AgResearch, and will allow for the expansion of Waikato Innovation Park.
When fully developed, Ruakura will become New Zealand's largest integrated development, which will be anchored by a 30ha inland port. Ruakura will become home for up to 8000 Hamiltonians, and will deliver major economic, social, environmental and cultural benefits to Waikato and New Zealand.