The work will raise and widen a 3.3km section of Portobello Rd from Luss Rd, Company Bay, to Sandpiper St, Broad Bay, the Dunedin City Council said in a statement.
Traffic will be reduced to one lane during construction and manual traffic control will be in place to manage traffic queues.
Access to side road and resident driveways would be maintained.
The work is scheduled to take 18 months with completion expected in July 2021.
Council transport delivery manager Josh Von Pein said council staff were "working hard to co-ordinate the work to minimise the disruptions as much as possible’’.
"We’re grateful to the public for their co-operation while this work is being done."
The Vauxhall- MacAndrew Bay section of the Peninsula Connection was still under construction and was due to be completed in June next year.
So far, 2.2km of the 4.4km section of road widening has been sealed and new seawall has been completed along the full length.
The section from Bacon St to Portobello was completed in May this year, although minor work to raise pump stations was ongoing.
The section from Broad Bay to Turnbulls Bay is scheduled to begin in mid-2020.
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With all the work that has gone on along the Penninsula thus far, it is very much becoming an excellent place for pedestrians and cyclists alike. What I especially like is tha fact that people in wheel chairs and mobility scooters along with kids on bikes, all equally have an opportunity to enough an outing along what has to be one of New Zealands best urban jewels. More people are using this all the time, it will gain in popularity as it is completed. Well done DCC and contractors.