Central government funding of £1.5 million will enable works to begin on Monday 1 August at the A4123 Birmingham New Road/Shaw Road junction.
The scheme, which is scheduled to last until spring 2017, will reduce traffic congestion, improve conditions for cyclists and pedestrians, and address road safety concerns following several accidents at this location.
During the works lane restrictions will be in place during the off peak hours of 9.30am to 3.30pm, from Monday to Friday.
The scheme will improve access to urban centres and key new development sites by providing additional traffic capacity at what has become a bottleneck.
City of Wolverhampton Council will be working in partnership with Dudley Metropolitan Borough Council to deliver the project which will help unlock the development of housing on 6 sites - Bilston Urban Village and Ward Street in Wolverhampton, land off Darkhouse Lane and Peartree Lane in Coseley, Coseley Eco Park, and land off Bloomfield Road, Tipton.
Councillor Steve Evans, Cabinet Member for City Environment, said: "This is a key pinch point on the A4123 corridor that restricts access to a number of local development sites and strategic through routes, impacting on potential jobs and growth in the local area.
"We apologise in advance for any inconvenience the works cause and would urge road users to remain patient.
"When completed, the new road layout will make life easier for residents, commuters and businesses in Wolverhampton and Dudley."
The improvements will provide new filter lanes from Birmingham New Road, new and improved pedestrian crossing facilities and new cycle infrastructure, as well as bus priority measures.
It also fits in with the 2 local authorities' economic and transportation priorities to link the surrounding communities with the retail and employment sectors by foot and cycle.
Dudley Metropolitan Borough Council have also been approached by South Staffs Water to replace 370 metres of pipe work in Coseley this summer, which will also impact on the Birmingham New Road/Shaw Road junction.
Ivyhouse Lane will be closed from 23 July to 7 August, with diversions along Tunnel Street, Green Street, Mason Street, Birmingham New Road and vice versa.
Havacre Lane will be closed from 8 August to 4 September, with diversions along Fullwoods End, Ivyhouse Lane, Birmingham New Road, Shaw Road, Biddings Lane and vice versa.
Councillor Hilary Bills, Dudley Metropolitan Borough Council Cabinet Member for Environmental Services, said: "This is essential work being carried out by South Staffs Water which will ultimately affect people driving around that area. But we are working with them to make sure we try and ease traffic flow wherever possible.
"Traffic will already be affected by work across the border, which is along one of our diversion routes, and therefore it is essential we work closely with our neighbours to make sure we do everything we can to keep traffic moving."
- released: Wednesday 6 July, 2016