Gungahlin Drive will be widened and the roundabout at Gundaroo Drive improved with traffic signals as part of a broad ACT government package to ease traffic in Canberra's north.
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It comes after a series of complaints by Crace residents about traffic at the intersection of Gundaroo Drive and the Barton Highway at peak hours.
Gungahlin Community Council vice-president Peter Elford said the lack of roads in and out of Crace created congestion.
Most traffic moved toward the city via the Barton Highway roundabout, which was a well-known trouble spot.
"There are a number of traffic issues that the ACT government should have anticipated in Gungahlin, and this is just one of them," Mr Elford said.
There were also some concerns about direct bus services that might exacerbate existing traffic problems, he said.
Roads Minister Mick Gentleman said the roundabout would be streamlined as part of four major road improvements in Gungahlin. The improvements would be completed by the end of 2016.
"Gungahlin Drive will be widened to three lanes southbound from north of Sandford Street through to the Barton HIghway," he said.
"This 1.6 kilometre section of the road experiences heavy traffic flows in the morning peak period and this simple improvement will make a big difference."
Mr Gentleman said the improvement to Gungahlin Drive would also help ease congestion during the construction of light rail, which is scheduled to begin in 2016.
"[There will be] improvement to the Barton Highway/Gundaroo Drive roundabout to improve safety and traffic flow," he said.
"Traffic signals will be introduced to control the traffic according to the time of day. An additional lane will be added to all four approaches to the roundabout to better manage traffic."
There are upgrades planned for Horse Park Drive and Anthony Rolfe Avenue intersection and minor works on the intersection of Gundaroo Drive, Candlebark Close and Nudurr Drive.
Molonglo MLA Meegan Fitzharris said residents often raised concerns about Gungahlin's roads and she believed the announcement would go some way to fixing those issues.
"It is clear the ACT Labor government is working hard to improve the road network in Gungahlin which will help alleviate traffic congestion, particularly at peak times," she said.
Construction will begin in the third quarter of 2015 and is expected to be completed within a year.
