Final support has been given for the £148 million North Hykeham Relief Road to be a dual carriageway.
Senior county councillors gave approval for the project to go ahead and for funding to be sought from the government.
Now, the council will now look to bid for £104 million of funds for the plan from the Department for Transport.
It would mean that the county council would foot around £34 million of the cost with £10 million being paid by the developer.
The road would join the ongoing Lincoln Eastern Bypass and the A46 in the west – completing the city’s ring road.
Councillors on the authority’s Highways and Transport Scrutiny Committee previously described the scheme as a “no brainer”.
Now, the county council’s executive have backed the proposal.
Senior councillor for highways, Richard Davies, said the project is “not without its challenges” but is a popular scheme.
“It’s an exciting project not just for North Hykeham but for the wider authority area,” he said.
“It’s not without its challenges, the costs are eye watering at times.
“But, after extensive consultation, it is an ambitious project and popular locally.”
Council leader, Martin Hill, said the road is part of a larger package in the county.
Meanwhile, Councillor Colin Davie, executive member for economy, said the country needs to invest more in its highways.
“It’s a good scheme and needs to be seen in context,” he said.
“We need to catch up as a country if we want to deliver the scheme that we need.”
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