Stage two of the multimillion-dollar Caversham highway development has begun.
The New Zealand Transport Agency (NZTA) planned to start removing houses it had bought within the project area next month.
Contract company Downer was developing a detailed construction programme in preparation for initial excavation early next year.
Construction will be undertaken in two phases, from Barnes Dr to South Rd and then around Lookout Point, including the Riselaw Rd bridge.
The NZTA said starting Caversham Valley works first allowed the contractor to move seamlessly from the recently completed four-lane Caversham bypass, while final land requirements for the Lookout Point work were concluded.
The agency expected to complete the initial construction phase up to South Rd by July or August next year, although final road surfacing would likely be done during the summer of 2013-14.
A further 14 months had been allocated for completion of the Lookout Point section, but the NZTA said an exact end date could not be finalised until all land requirements had been sorted out.
Regular users of Short St, Riselaw Rd and Mornington Rd were not likely to see any changes during the initial phase of construction and bus routes would not change until Lookout Point work began.
The NZTA would work with the Otago Regional Council from mid-2013 to provide timely information about bus route changes.
Highway access for Aberfeldy St and Burnett St residents would be continued as far as possible.
Overall, the Southern Motorway extension was estimated to cost up to $45 million and improve the entire 13km stretch between Dunedin and Mosgiel.
The second stage was expected to cost between $20 million and $25 million and involve two years of construction.
The first stage was officially opened earlier this month.
