Prime Minister Anthony Albanese says the $2.1 billion M1 Motorway extension to Raymond Terrace is a "nation-building" project which will help reduce the road toll.
Mr Albanese joined a group of Hunter politicians and federal Infrastructure Minister Catherine King in Heatherbrae on Tuesday to inspect part of the works.
Contractors John Holland-Gamuda and Seymour Whyte Constructions have started earth works on large sections of the 15-kilometre Hexham bypass, including cutting a wide swathe through bushland east of Raymond Terrace.
The road will take cars from the existing end of the motorway at Black Hill before rejoining the Pacific Highway north of Raymond Terrace. It includes a new 2.6km bridge over the Hunter River.
The extension will take an estimated 25,000 cars off local roads every year when it opens in 2028.
"It will make a big difference for the region. It'll make a big difference for the nation as well," Mr Albanese said.
"For locals, taking 25,000 cars off these roads, but for those people travelling from Sydney through to Brisbane it will make an enormous difference.
"But it's also a nation-building project because it will boost productivity."
Mr Albanese said Newcastle port was "one of Australia's most important" and the M1 extension would "ensure there's massive productivity benefits for all in the region".
"In addition, this is about jobs, creating over 3000 jobs during construction, but many more jobs will be created as a result of this fantastic infrastructure project."
Australia's road toll grew 7.3 per cent to 1266 deaths last year compared with 2022, mostly due to large rises in NSW (24.9 per cent), Victoria (22.5 per cent) and South Australia (64.8 per cent).
The government has convened a national road safety conference for February 22 and plans to roll out a road safety advertising campaign.
Mr Albanese said projects like the M1 extension would help address the problem.
"This is about road safety. When we build better roads, we get better outcomes for road safety," he said.
"Better outcomes means saving lives as well as reducing accidents which we've seen around the nation have risen, unfortunately, in recent times."
Maitland MP and NSW Minister for Regional Roads and Transport Jenny Aitchison said the project would take more than a third of the traffic off the troubled Tarro Bridge.
"I'm excited because it will take a lot of that rat-running traffic out of Maitland," she said.
The M1 extension work includes a linked project to widen the busy Hexham straight.
