Mottram in Longdendale is on the A57/A628 between Sheffield and Manchester, close to the eastern end of the M67 motorway
The new dual carriageway would run from the end of the M67 (junction 4) and through a new underpass to the north of Mottram in Longdendale. The road would then join the A57 east of the junction with the A6018 (Black Moor).
A new single carriageway road is also planned to link the A57 from Mottram Moor to Woolley Bridge, taking traffic away from the current route of the A57 along Woolley Lane.
£200m is the overall cost of the project to Highwasy England; the value of Balfour Beatty's contract is £108m. The contractor expects to employ a workforce of 200 on the job.
Early design works start this summer and construction work is scheduled to start by spring 2023.
Highways England project manager Andy Dawson said: “We’re pleased to have a contractor on board for the bypass which will take traffic away from Mottram in Longdendale, and provide quicker, safer and more reliable journeys for thousands of drivers every day.
“The bypass is part of a series of improvements we’re planning to improve journeys on the trans-Pennine route between Manchester and Sheffield, along the A57, A628 and A616.
“We can now start the detailed design work for the bypass and expect to be able to hold a public consultation on our proposals this winter.”
Work also started earlier this year to improve the flow of traffic at Westwood roundabout in Tankersley, on the stretch of the Manchester to Sheffield route near the M1 in South Yorkshire.