The federal government will redirect millions of dollars in road funding to the Megalong Valley and Railway Parade between Wentworth Falls and Lawson.
The announcement comes after the Megalong Valley was cut off following a landslide on Megalong Road on April 5.
The Labor Party's original $12.5 million election commitment - made while in opposition in 2022 - involved a range of upgrades to the Blue Mountains road network but many of the intended roads have already been repaired through the state and federal government's disaster funding arrangements.
After working with the Blue Mountains City Council, the federal government agreed to reallocate the election funding to Megalong Road and Railway Parade, and will fully fund the upgrades.
The project will cover 8km of Megalong Valley Road between Blackheath Glen Reserve Campground and Old Ford Reserve Campground and 5.5km of Railway Parade between Wentworth Falls and Lawson.
It will deliver heavy patching, road resealing and rehabilitation work, including kerb, gutter and drainage upgrades.
Construction is on schedule to commence in mid-2024, with detailed design and tender processes already underway.
Federal Member for Macquarie Susan Templeman said she was "really pleased that with the Blue Mountains City Council we've been able to provide this funding where it is needed most".
"In recent days we've seen just how vital our local roads are to residents and businesses, and while there is urgent work being done on the latest Megalong landslide, I am pleased we can help the council make the road network more resilient," she said.
Blue Mountains mayor Mark Greenhill said the full cost of road repair in the Megalong Valley is "more than the council's annual income, and recovery will need to be a partnership between local, state and federal governments".
"We look forward to getting this much-needed upgrade underway while focusing on the immediate repair needs of the disaster-affected areas."
