The Australian government has finally started construction on the Bega bypass in New South Wales for a total cost of A$60m ($59.6m).

The project is going ahead more than 30 years after it was first suggested, following three years of extensive planning, community consultations and preconstruction activities.

NSW Roads Minister Duncan Gay said the project will involve building a new 3.5km two-lane road to the west of the existing Princes Highway, between Bega River Bridge and Finucane Lane.

"As well as new bridge crossings at High Street and Ravenswood Street, there will also be a new underpass at Applegum Close, as well as two major access points linking the town, the bypass and the properties to the west," Duncan added.

Eden-Monaro MP Mike Kelly said the ground-breaking ceremony celebrations of the Bega bypass were possible because of the persistence of all those in the local community who have championed the project over the years.

"The beginning of a new era for Bega is now closer than ever before," Kelly added.

"The Bypass is no longer just an aspiration or a line on the map. It will soon be a real road delivering real benefits including safer, quicker driving conditions and more than 500 fewer trucks a day rumbling through the town."