Tenders have been called for the construction of the Foxground and Berry bypass.
Kiama MP Gareth Ward said the project would provide a four-lane divided highway separated by a median for 11.6 kilometres between Toolijooa Road and Schofields Lane, south of Berry.
The upgrade includes a bypass of the existing winding highway at Foxground and a bypass of Berry with interchanges provided for access either side of Berry.
Tenders will close in December.
"The award of the contract is expected in the first half of next year, with detailed design to start immediately and major work soon after," Mr Ward said.
The expected completion date is 2018.
The Foxground and Berry bypass project was approved in July by the NSW Minister for Planning and Infrastructure.
"The upgrade will provide significant safety, traffic flow and travel time improvements and will reduce flooding for many properties in Berry," Mr Ward said.
He said the RMS would continue to consult with property owners for investigations to prepare for the detailed design and construction phases.