Last week, Essex County Council's cabinet agreed its preferred route for the road, which would be constructed to the east of Colchester.
The road would run for 2.09 kilometres from a new roundabout on the A133 east of the University of Essex, joining the A120 via a junction east of Strawberry Grove.
A statement from the council, which is the highways authority for the county, said the new road would be funded through a £99 million investment from the government's Housing Infrastructure Fund (HIF).
It added that the scheme would support a proposed new garden community, also to the east of the town.
The proposed new community, on Colchester's border with neigbouring Tendring council, is allocated in a joint local plan, prepared by the two authorities with Braintree council.
The allocation of the settlement received the backing of a planning inspector last month. The inspector advised that the financial viability case for the proposed garden community was "very strong" and "necessary infrastructure" to support the scheme was "deliverable in the time-frame necessary".
However, two other proposals for garden communities in north Essex, totalling 34,000 homes, were rejected by the inspector because he considered them to be neither deliverable nor viable.
Essex County Council said the HIF funding would also provide elements of a new rapid transit system for the town, "further helping reduce the need to access the town centre by car".
It said work will now be progressed on the design of the road, with a planning application expected at the end of the year. The council expects the road to be completed by 2024.
Council leader David Finch said: "Within the consultation last year, we set out a number of feasible options for the new road. We have looked closely at the comments given, as well as the environmental, cost and engineering considerations, all of which form an important part of the decision-making process.
"Option 1C was the most popular option, and through slightly amending the route, we have been able to lessen the impact on Strawberry Grove, Turnip Lodge Lane (a protected lane) and nearby communities, while still meeting the objectives of the scheme, which is important."
An article examining why the local plan inspector backed the Colchester-Tendring garden community proposal in the joint local plan but blocked two others can be found here.