Work to "kick-start the regeneration of the Camborne, Pool and Redruth area" can now begin after receiving final approval from local transport minister Norman Baker yesterday.
Mr Baker said: "This important scheme will encourage the wider regeneration of the Camborne, Pool and Redruth area by providing a new East-West road to remove traffic from the A3047 and allow public transport improvements between Roskear and Barncoose.
"The £16.1 million we are putting into this scheme shows that the coalition government is serious about investing in the infrastructure the country needs to drive economic growth."
The scheme will deliver a new road from Dolcoath to Dudnance Lane across the Red River valley and the old South Crofty mine site, including a new junction on Dudnance Lane.
A new road from Station Road to Wilson Way, "removing traffic" from the centre of Pool will also be built.
There will be minor improvements to other roads in the area, including footways, cycleways and new lighting.
The Camborne-Pool-Redruth package was one of the schemes given funding approval last year as part of the spending review process. Work can now start on the construction with the project scheduled to complete in November 2014.