Upgrading the bridge over the Shoalhaven River at Nowra is a project of "national significance", according to a state and federal government advisory body.
Infrastructure Australia has added the Nowra Bridge project to the latest edition of its Infrastructure Priority List, classing it as a "priority initiative" that addresses a "problem or opportunity of national significance" with a timeframe of 0-5 years.
State and federal governments have each committed $155 million in funding for a new four-lane bridge for northbound traffic.
Infrastructure Australia's Chief Executive Romily Madew said the business case showed the bridge was a "sound investment" that would deal with the expected increase in traffic volumes.
"The existing bridges at Nowra carry more than 50,000 vehicles each day, with the southbound bridge in particular experiencing significant congestion in both the morning and afternoon peaks," Ms Madew said.
"Peak-hour travel speeds are already extremely slow at 16km/h, and without upgrades, this is expected to deteriorate further to just seven kilometres per hour in 2038.
"This will result in significant delays for the region's growing population, as well as tourists travelling to the South Coast and freight vehicles, which are critical in linking industry to export markets through Port Kembla."
Ms Madew said there was the added constraint that the existing southbound bridge could not carry heavy vehicles taller than 4.6 metres.
Those southbound trucks are forced to travel on the northbound bridge under police escort, which means the bridge is closed to traffic heading north during those times.
Other Illawarra projects on the list include improved freight rail access to Port Kembla, which has been allotted a zero to five-year timeline.
"Port Kembla is a significant economic asset," the Infrastructure Australia list stated.
"Maintaining efficient movement of freight to and from the port is a nationally significant challenge."
The F6 extension - which the government has decided will no longer run all the way to Waterfall - is a priority initiative with a medium term time frame of five to 10 years.
Improvements to make Picton Road safer and able to carry more traffic is also a priority with a five to 10 year timeframe.
Upgrading the rail line between Wollongong and Sydney is also a priority initiative, albeit with a long-term timeline of 10-15 years.