Prime Minister John Key has turned the first sod on Transmission Gully at a ceremony marking the beginning of work on the 27-kilometre four-lane highway near Wellington.
Transmission Gully will connect with the Kapiti Expressway to the north.
Once it is completed in 2020, four lanes will run from the Terrace Tunnel in downtown Wellington to north of Otaki.
The project will be the first state highway in New Zealand to be delivered as a Public Private Partnership.