The $4.5 million project will see a right-hand turning lane installed at Murrumbateman Road and will straighten one kilometre from that turn off toward Canberra.

“Together, these measures will make the road less hazardous for the more than 10,000 motorists and truck drivers who travel long it daily,” a media statement from Anthony Albanese said.

Yass Valley mayor Rowena Abbey told the ABC she welcomed the funding decision, but she is calling for the highway to be duplicated and re-routed away from the township.

"The council and all the members of the community are happy to have any funding on the highway to make improvements," she said.

"The concern really relates to the fact that nobody, either state or federal funding, has been committed to the duplication. That is the bigger issue for the community."

The work is set to start in April next year and to be completed by late 2013.

No money has been announced for the full duplication of the highway, or the Murrumbateman bypass.