A total of £14.8 million in funding has been allocated for the A6 L'Derry to Belfast road upgrade.
The announcement was made by Finance Minister Conor Murphy.
Sinn Féin MLA Martina Anderson has welcomed the funding.
She said: "Completion of this vital project will reduce journey times from Derry to Belfast, boost the local economy and improve road safety.
"Work is underway and is progressing well on the other phases of this vital infrastructure project and I look forward to seeing their completion in the time ahead."
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