NZ Transport Agency project manager Jason Forbes said work had started at the southern portion of the 2.6km bypass, which is expected to carry more than 5000 vehicles daily when completed.
Mr Forbes said depending on the weather, most of the new highway north of the roundabout would be sealed within the next two weeks.
"Works have started on the very southern end, so this portion will start taking shape and will be visible from the existing highway."
Fulton Hogan, which was awarded the $15 million contract last year, was using 3-D controlled machinery for the first time on a Southland project.
"This equipment carries advanced technology to carry out earthworks with greater efficiency and accuracy than conventional machinery."
Mr Forbes said there had been no unexpected challenges so far and the project was expected to finish on time and within budget.
Moving highway traffic away from its present location is expected to improve safety and bring considerable environmental benefits to the Edendale community, such as less traffic noise and reduced vehicle emissions.
