The Transport Agency has announced its preferred option for a route to take traffic through the east of Rotorua.
The agency's regional director, Harry Wilson, told a Rotorua District Council meeting on Tuesday the route between Te Ngae Road and the shore of Lake Rotorua is the favoured option.
Mr Wilson said it will save travel time, improve safety, ease congestion and enable lake water quality improvements to go ahead.
He said the next step will be to confirm the extent of land required and prepare a notice of requirement to be lodged with the council.
Mr Wilson said the agency needs to complete consultation with key stakeholders, affected landowners and iwi as part of that preparation.