The Southland District Council has unanimously backed the proposed Haast-Hollyford Highway going forward for government approval.
The controversial 130km toll road, planned by a private company, would pass through the Fiordland National Park. It is expected to cost $250 million.
The road has the support of all four West Coast councils and many local people, but needed Southland's backing to proceed.
After a short discussion this afternoon, all councillors voted to support the project going into both the regional and national land transport programmes, to be investigated and assessed further.
Southland mayor Gary Tong said it was a significant step, which put the ball back into the court of the road company, Haast Hollyford Highway Limited.
Mr Tong said he believed the road would have many benefits, but it still had many obstacles to cross before it was built.
Transport Minister Simon Bridges has said the road would have to go through normal road planning processes to get any government support.
Haast Hollyford Highway Limited said the latest estimate was that the project would cost $250m, which it had already raised from an overseas investor.