The bypass will join the A428 to the west of Bedford with the A6 north of the town.
The Homes and Communities Agency (HCA) has been working closely with Bedford Borough Council to enable work to start on the final phase of the much needed bypass and the associated homes and employment area.
When complete, the second phase of the Bedford bypass will pave the way for 1,200 new homes to be built on land owned by Hallam Land Management, part of the Henry Boot Group, who will be the residential developer.
With a funding deal in place, preliminary survey work on the site should get underway in the next few weeks.
The 2.2km Northern Link is a £16.5m project and is anticipated to be complete by 2015.
The first phase of the bypass between the A421 and the A428 was completed in 2009.
The tender process for the road construction contract will begin soon.
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