The Transport Agency has awarded Downer the contract to build extra lanes at the Fraser St and 15th Avenue intersection, add two pedestrian crossings on 15th Avenue and improve cycling and walking routes on State Highway 2A.
The project, known as Hairini Link Advanced Works, will cost $4 million and get under way in two weeks.
It is expected to take six months to complete. The site will be closed for three weeks over Christmas.
Transport Agency Bay of Plenty state highway manager Rod James said the large volume of traffic using the route meant the work would be complicated.
"The first stage will be relatively straightforward with minimal disruption to road users. It includes shifting existing services - water main, stormwater and gas lines, electricity and telecommunications cables - constructing the extra road width around the intersection, pouring the new curb line and installing new traffic poles.
The site will then close down for three weeks over Christmas.
"The tricky part of the construction will take place after Christmas."
To give the contractor a clear run at completing the job quickly to lessen disruption to road users, Fraser St between 14th Avenue and 16th Avenue would be closed for nine days in mid-January.
During the closure, Downer would be working 16 hours a day reconstructing the existing road pavement, re-marking the road and testing traffic lights.
Traffic will be diverted and signs put up.