Member for Heathcote Lee Evans says money from the government's proposed power assets sell-off could be used to fund a separating barrier on Appin Road.
His comment came less than a day after a 28-year-old woman was killed and a 67-year-old woman was seriously injured in a head-on car crash on the road.
Mr Evans said money from the long-term leasing of the state's electrical "poles and wires" assets could be used to improve safety on the horror stretch of road.
"I think potential monies we'll gain from the lease of poles and wires, we can look at further upgrades.
"That's what it's all about - things on the back burner can be brought forward.
"Along Appin Road the separation of traffic is the most important thing that needs to be looked at."
Mr Evans said $745,000 had recently been spent resurfacing Appin Road, and a further $100,000 would be spent by late June on upgrading signs and line markings along the entire route.
The funding allocation was in response to a Roads and Maritime Services report, released in March, which identified four danger spots along Appin Road. Tuesday's crash occurred at one of the danger spots, known as "cluster four", about 1.8 kilometres north-west of Loddons Creek.
NSW Premier Mike Baird said black spots such as those on Appin Road were a priority for the state government.
"I'm deeply sorry to hear about a fatality," he said.
"Appin Road is an important road, and I know that we are providing funds into upgrading it.
"Clearly, black spots are identified for a reason and that is our priority - the sooner we have money to put into those, the better."