The Southway in Creggan is to benefit from a £270,000 resurfacing scheme.
The works will run 1,000m from the junction of the Circular Road to Lonemoor Road.
Beginning on Monday, the body of work is expected to be completed by mid-January 2017.
The Minister for Infrastructure, Chris Hazzard said:
“These works will deliver significant improvements to the strength and road surface quality of this stretch of carriageway.
“The benefits of the re-surfacing scheme will help meet the needs of the local economy and improve transport connections for people, goods and services.”
The road will be reduced to a single-lane while work is carried out.
Councillor Kevin Campbell welcomed the development, he said:
“This is great news for the hundreds of motorists and pedestrians that use Southway on a daily basis.
“I had been getting constant complaints from residents living in the area about the state of the road.
"The Creggan estate has a population of around 12,000 and has only three main arterial routes into the estate and Southway being one of them is in a very bad state."
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