The preferred route for the A5 western corridor between Derry and the Border has been announced by Minister for Transport Noel Dempsey.
The dual carriageway between the border at Aughnacloy and Derry-Letterkenny will "make a world of difference to the accessibility and connectivity of thew hole northwest region of Ireland, to and from the rest of the island," Mr Dempsey said.
The route is part of a €580 million investment announced by the Irish Government in 2007, which included the A8 Larne to Belfast project. The Government is to issue a first payment of €9 million towards this project by the end of the year.
The Government's commitment to the project was reaffirmed at a North-South Ministerial Council plenary meeting on July 6th.
Mr Dempsey made the announcement with Minister for Regional Development in the Northern Ireland Executive Conor Murphy.
The economic and social benefits of the project for the region and the all island economy more than justified the investment and would "help to position us to avail of a return to economic growth," Mr Dempsey said
Construction of the road is expected to begin in 2012/2013 and it is due to be completed by 2015.
An environmental impact statement will need to be prepared before the planning process can be completed and land acquisition can begin.