Expected to be completed by the middle of next year, the realignment aims to improve safety and increase accessibility for Southland communities and businesses.
The NZ Transport Agency says the four-leg roundabout near Fonterra's Edendale plant is also nearly finished.
Work has already started on the fourth leg of the roundabout, which will serve as the new milk tanker access road for the plant.
Higher temperatures were needed to apply the final layer of seal, which meant the task would be left until spring.
An NZTA spokesman said what is believed to be Southland's largest concrete box culvert was installed as part of the project.
It will carry the Oteramika Stream under the new alignment.
All 2.6km of the alignment has been paved, lighting at the roundabout has been installed and a large drainage pond formed beside the roundabout.
While recent wet weather had slowed progress, site clearance work - which included tree felling - had started in preparation for the relocation and installation of water and power, as well as pavement construction.
Construction on the pavement for the Fonterra access road as well as the tie-ins at each end back on to SH1 and into the Edendale township still need to be completed.
