The authority’s Highways Committee on Monday was updated on the project, including plans for appointing Balfour Beatty as the scheme contractor for the road, which could cost up to £212 million.
The project would see a new dual carriageway built, linking the A46 Pennells Roundabout to the Lincoln Eastern Bypass, creating a complete ring road around the city.
The council hopes the new road will cut traffic in and around North Hykeham, Lincoln and the surrounding villages, as well as meet growth targets and better connect the A46 between the Midlands through to the Humber ports.
The cost of the scheme is currently estimated to be between £179m and £212m with costs having risen since it was first announced due to national spikes in labour and material costs, along with inflation.
The majority of the money has been secured with £110million from the Department for Transport, £38million from LCC and £10,000,000 from developer contributions.
However, the report said there was a funding gap of between £24.8 to 57.9million, with the DfT currently not putting in any more funding.
Council officer Sam Edwards said there would be conversations about how to fill the gap and that the council would “continue to look for other funding opportunities”.
It is hoped a planning application for the project will be submitted in 2023 with construction starting November 2025.
City of Lincoln Councillor Tom Dyer said: “This project couldn’t come soon enough. It massively impacts my division… it is certainly a game changer for North Hykeham, Waddington and even south of Lincoln and the whole of the Lincoln area.”
As well as finances, councillors also queried the impact on wildlife and archeology.
They praised the road for being dual carriageway and including cycling provision.
As part of the project, new roundabouts would be built at South Hykeham Road, Brant Road and Grantham Road. A number of bridges would also be constructed, including at Station Road and over the River Witham.