The company contracted with building the £99 million Lincoln Eastern Bypass has entered liquidation.
International construction giant Carillion has gone into compulsory liquidation after talks by the company’s bank lenders at the weekend collapsed.
The final completion of the Eastern Bypass project will be delayed until Lincolnshire County Council appoints a new lead contractor.
Questions still hang over how long the project will be set back for and how staff and subcontractors working on the project will be affected.
Carillion was named as the lead contractor for the project in 2016, holding around half of the value of the £100m scheme.
Work has already started on site, but was still in the very early stages.
The county council has started investigations into who will take over as the principal contractor.
Some work by Carillion is continuing on site for the foreseeable future.
Elements by partner contractors such as the new rail bridge, archeological digs and work by Anglian Water will continue on site.
Carillion announced it would go into liquidation on the morning of Monday, January 15, putting thousands of jobs in doubt.
Talks between the firm, the government and lenders failed to reach a deal.
The government will however continue to put funds towards maintaining the public services currently run by the service, such as some prisons and schools.
Carillion is also involved in major projects like the HS2 rail line.
It maintains 50,000 homes for the Ministry of Defence and is the second biggest contractor for Network Rail maintenance.
Concerns firs grew over the future of the company when it issued a profit warning back in July, 2017.