Birse has been confirmed as the main contractor to deliver the Beverley Integrated Transport Plan (BITP).
Work is anticipated to be complete by early 2015.
The scheme will include the Beverley Southern Relief Road, amendments to the Grovehill junction, Swinemoor roundabout and Flemingate level crossing and signing works to reclassify the road network in and around Beverley.
Councillor Stephen Parnaby OBE, leader of East Riding of Yorkshire Council, said: “The appointment of a contractor for this important highways scheme is another significant milestone passed and in Birse Civils Limited we have a Yorkshire contractor delivering the project, providing a timely boost for the construction industry.
“BITP represents excellent value for money and will result in improved transport infrastructure for Beverley in the long-term, plus immediate benefits such as the involvement of the local business community in its delivery, safeguarding jobs and providing the opportunity for local young people to gain valuable work experience and improve employability and skills.
Stephen Semple, spokesperson for Birse Civils, said: “Our experience in coordinating complex civil engineering works within a live highway environment will help ensure that disruption to the local community and travelling public is kept to a minimum.”