The government has given the go ahead for the Bexhill to Hastings link road.
The Chancellor, George Osborne, announced in his budget speech yesterday that £56 million has been set aside to "facilitate economic regeneration in a deprived area of the South East."
East Sussex County Council has welcomed the news of the funding but environmental groups who have been campaigning against the development have criticised the decision.
Peter Jones, leader of the council, said: "The link road is absolutely crucial to the regeneration of Hastings and Bexhill and is a once in a generation opportunity to make a step change to the most deprived local economy in the South East.
"We believe the link road will facilitate construction of 1,200-2,000 new homes and business park space of 50,000 square metres, which will create at least 3,000 new jobs."
The proposed road, which would link the A259 and B2092, goes through Combe Haven Valley close to a site of special scientific interest.
Craig Bennett, from Friends of the Earth, said: "This will be one of the most damaging road schemes in the South East of England and will do nothing to end our transport chaos."
Interviewed after the budget, Danny Alexander, Chief Secretary to the Treasury said:"Measures to drive growth and rebalance the economy will support the South East, with an extra £46m for the South East Local Enterprise Partnerships to unblock local projects and confirmation of £56m of support for the Bexhill to Hastings link road."