Motorists should be driving on a sealed Maria River Road within three years.
The coalition government gave a $17 million pre-election commitment to fund the project.
The funding is available via the federal government and the state government's fixing local roads program.
With the funding confirmed on July 9, design works and planning will take 12 months to complete with tender details expected to be available in the second half of 2021.
The sealing works is expected to take 12 to 18 months to complete.
The majority of the works will follow the existing road with consideration to hydrology and ecological constraints as part of the environmental assessment.
North Shore Progress Association president Kingsley Searle welcomed the confirmation of funding and timing of the works.
"We are over the moon. This is great news and just what we needed," he said.
"The community now has some timeframes around the works and we can now keep an eye on this project so that it stays on track.
"Our association represents all residents in this area. This road (sealing) will be a great boost to the local residents who have long called for the sealing of the road.
"As well, there is a serious safety issue with the existing road surface."
Mr Searle said the sealing will improve the quality of life for residents while making it a safer trip between Crescent Head and Port Macquarie.
Port Macquarie-Hastings Council mayor Peta Pinson said the community is excited about the project.
"The residents have long been advocating for this project and now their voices have been heard," she said.
"We will now see tourism flourish while the sealing will bring these two communities together.
"It is a beautiful trip and along with the ferry ride will now add to the experience. It will make travelling between our two shires much more pleasant."
The mayor also indicated that if the collaboration proves successful on this project it could lead to other joint works.
"This could be the start of future projects where we (the two councils) work collaboratively to deliver great projects on behalf of our two respective communities," she said.
This could be the start of future projects where we (the two councils) work collaboratively to deliver great projects on behalf of our two respective communities.Kingsley Searle
Kempsey Shire Council director of operations and planning Robert Fish said confirmation of the funding arrangement enabled works to begin in earnest.
"We can now move on with design works for the project and ultimately proceed toward a tender and get the construction process underway," he said.
"We expect, given the scale of the project, that a reasonable period of time - about 12 months - will go to planning.
"This will enable us to go to tender in the second half of 2021 and delivering the works over a 12 to 18 month period.
"This would see the project completed sometime in 2023."
This would see the project completed sometime in 2023.Robert Fish
Mr Fish said the entire project would be under the one tender in collaboration between the two councils.
He said a steering committee would guide the decision making process.
"Sealing the road will provide greater road safety while improving the tourism benefits by opening the corridor between Crescent Head and Port Macquarie."
Port Macquarie MP Leslie Williams said she was pleased for the local residents.
"For many years locals have been crying out for this road to be sealed and now their wishes will be delivered," she said.
"I look forward to councils getting on with the job.
"Councils can now undertake full planning and design works on this critical project."
Oxley MP Melinda Pavey said the funding will get the project underway.
"This funding will be used to help get this joint project underway and have this important road planned, designed and completed," she said.
"Kempsey Shire and Port Macquarie-Hastings Council have done a lot of work in recent years on the costs, benefits and design aspects of sealing Maria River Road."
Federal MP Pat Conaghan said he was pleased the government was rolling out funding for shovel-ready infrastructure projects.