The Project appraisal for Newgate Lane Fareham was approved by the Executive Member for Economy, Transport and Environment, Cllr Seán Woodward.
On making his decision he said: "The improvements to the northern part of Newgate Lane mark the first stage of a wider strategy to ease congestion and provide better access to Gosport Peninsula and the Solent Enterprise Zone.
"The scheme approved today will provide two lanes in each direction along the busy northern section of Newgate Lane, improve the associated junctions and provide better off-road pedestrian and cycling facilities.
"We aim to follow this first phase of works with improvements to the southern section of Newgate Lane and the Peel Common roundabout. We are also working up proposals to further improve western access to Gosport including a bypass around Stubbington and improvements to the A27 corridor. Combined theses measures will tackle the traffic problems residents, commuters and tourist face when travelling to and from the Gosport Peninsula."