The bypass will greatly reduce traffic in the centre of Broughton and improve journey times for motorists by creating a new route from the Broughton roundabout at Junction 1 of the M55 to the A6 north of the village.
Lancashire County Council was first granted permission for the new road in 2001 but funding was only agreed in 2013.
A shortlist for the main £12m construction contract is currently being drawn-up by the council.
County Councillor John Fillis, Lancashire County Council cabinet member for highways and transport, said: “The bypass is a key scheme in our highways and transport masterplan and is vital to unlock future economic growth which would otherwise be strangled by worsening congestion.”
The bypass is seen as key to unlocking further developments under Preston’s £383m planned City Deal.
Karl Tupling, Homes & Communities Agency, Executive Director North West said: “The construction of the Broughton Bypass is significant because by improving the capacity of the local road network it means that future phases of development at key City Deal sites, such as Whittingham Hospital, will now take place.
“The opening up of Whittingham will also directly contribute towards the construction costs of the Bypass, and is further evidence of the City Deal partners commitment to creating a strong economic hub for the North West.”
Work is scheduled to start at the end of 2015 and be completed in Spring 2017.