The Secretary of State for Rransport has allowed land to be assembled for the Preston Western Distributor scheme.
The proposed scheme, which will link the west side of the city to the M55, is the biggest new road programme in the Preston, South Ribble and Lancashire City Deal.
It also includes two new roads connecting to existing and developing housing areas in north-west Preston and Cottam.
A Public Inquiry was held in November, following objections to the Compulsory Purchase Order to acquire the land to build the new road.
The Secretary of States decision enables Lancashire County Council to assemble the land needed for this scheme.
The City Deal is an agreement between central government and the Lancashire Enterprise Partnership (LEP), Preston City Council, South Ribble Borough Council and Lancashire County Council, along with Homes England.
It is anticipated that construction work will start later this year, with these new roads expected to open during 2023.
It will help to create more than 20,000 new private sector jobs and see more than 17,000 new homes built across the area, along with new school places, open green spaces and new health provision to cater for the growing population.
Objections had been lodged to the compulsory purchase orders needed to acquire the land on which the route will be built.
But following a decision by the Secretary of State, construction work is now expected to begin later this year – and be completed by 2023.
The £161m scheme is part of on-going plans to build more than 5,000 new homes to the north west of Cottam – and also includes two separate adjoining link roads.
The Blackpool Gazette revealed last month that a separate legal challenge relating to the entrance to a planned garden village in the North West Preston development area had been dropped.
The 2.5-mile dual carriageway route will connect a new junction on the M55 at Bartle to the A583 Blackpool Road and A5085 Riversway in Preston.