Lake Macquarie City Council says the "straightforward" upgrade of Mandalong Road at Morisset is its top funding priority in Tuesday's state budget.
The planned upgrade won commitments from the state and federal governments last year for a total of $76 million, but a cost blowout and delays have cast doubt over the project in one of the Hunter's most important growth areas.
The federal government has promised $56 million and the NSW government $20 million, but the work is now priced at $122 million on the federal Department of Infrastructure website.
The road upgrade would help alleviate a traffic bottleneck to and from the M1 Motorway in an area earmarked for major housing, retail and tourism developments.
A council spokesperson said on Friday that LMCC "continues to work with Transport for NSW" on the project and "advocate for the timeline to be accelerated".
"We have engaged directly on this issue with key ministers in the Minns government since the May election, including the Minister for Regional Transport and Roads, Jenny Aitchison," the spokesperson said.
"Council's budget submission argues that prompt delivery of urgent transport infrastructure projects is needed to facilitate new housing and investment as well as addressing issues of safety and amenity for road users.
"More than $1.2 billion in private investment relies on this straightforward upgrade proceeding without unnecessary delay."
Ms Aitchison announced in Denman on Friday that the budget would include a new $390 million program to help 95 regional councils fix their roads.
The Regional Emergency Road Repair Fund will top up the $280 million regional portion of the previous government's Regional and Local Roads Repair Program, open to all NSW councils to repair flood damage.
Councils will not have to apply for grants under the new program but will receive a share of the money based on the total length of roads for which they are responsible.
Newcastle council is not eligible, but Lake Macquarie and all other Hunter councils will receive a portion of the funds.
Eligible works include heavy road patching, smoothing and reshaping unsealed roads, drainage improvements and resurfacing.
The government will also establish the $334 million Regional Roads Fund for new projects, including detailed planning and design on the Gosford bypass and improvements along the Golden Highway.
National Roads and Motorists Association spokesman Peter Khoury lauded the government for delivering on its election commitment to support regional councils.
"Today's announcement by minister Jenny Aitchison will help save lives," Mr Khoury said.
"The NRMA commends the NSW government for this significant investment in regional and rural roads.
"Regional councils already had a tough job maintaining local roads, a job made demonstrably tougher after last year's flooding.
"We know the road toll in regional and rural NSW is particularly bad, representing 70 per cent of fatalities this year."
Singleton Council said on Friday that it would start work next week on more improvements to Putty Valley Road under another state program called Fixing Local Roads.
The $2.03 million project follows a $1.3 million upgrade to another section of Putty Valley Road funded in 2022 under the same program.