It aims to create a sealed loop through Litchfield National Park to provide access for local residents, visitors and pastoral and agricultural industries.
Construction will feature the installation of a new bridge over the Finniss River and a sealed two-lane, two-way rural arterial road with a speed limit of up to 100 kilometres an hour.
Flood is expected to improve after the completion of the loop, as previously the thoroughfare became impassable during the wet season due to flooding at the Finniss river.
The works are alongside the $12.1 million Turbocharging Tourism development to improve visitor capacity within the park and support new swimming locations, four-wheel drive tracks, new campgrounds and picnic areas.
An estimated additional 60,000 visitors to the site will be supported by the project, boosting regional tourism.
The road is expected to be completed and opened to the public prior to the 2020-21 wet season.
NT Minister for Infrastructure, Planning and Logistics Eva Lawler said the project will support 80 local jobs and improve access to the park.
“The sealing will mean residents, tourists and the cattle industry will all have year-round access to Litchfield National Park and the surrounding area via the Stuart Highway through Batchelor or via Cox Peninsula Road,” Ms Lawler said.