The installation of traffic lights at the intersection of Great King St (State Highway 1) and Howe St has been welcomed by Dunedin's George St Normal School.
The $180,000 lights are scheduled to be switched on before Christmas.
It was one of the few intersections on SH1 in North Dunedin not controlled by traffic signals, the agency said.
Work had just started and would include the removal of a pedestrian crossing on Great King St.
Pedestrians, including school pupils, would be encouraged to cross at the signal-controlled intersection instead.
NZTA Otago-Southland state highways operations manager Roger Bailey said it would improve pedestrian safety.
A kerbside drop-off and pick-up area would replace the pedestrian crossing, providing a "higher margin of safety" for motorists, cyclists and pedestrians alike.
Of the four people seriously injured in crashes at the intersection in the past five years, two were pedestrians.
George St Normal School principal Rod Galloway said the changes were a welcome improvement, boosting safety.
Pedestrian crossings on one-way systems could be problematic because if a car in one lane stopped for pedestrians, they could be obscured from the view of drivers in other lanes, he said.
