The £35.6m contract is the third of five phases on the Sunderland strategic transport corridor (SSTC 3).
Esh Civils is building a dual carriageway starting in Pallion which will run underneath the Queen Alexandra Bridge, into the city centre via Trimdon Street and incorporate a section of St Mary's Boulevard.
Work compounds are now in place the public and ground works will start in the coming weeks.
The contract includes utility upgrades and takes into account the land’s former use, geology and gradient which sees the construction of 2km of retaining structures.
Steve Conn, divisional director of Esh Civils, said: “We are extremely pleased to have been selected to construct the next phase of carriageway linking the Northern Spire Bridge and the city centre. We have a proven track record of infrastructure delivery across a range of sectors and have established a first-class team of professionals to work with our client and our local supply chain to deliver this project.”
Sunderland City Council leader Graeme Miller said: "As a city, we cannot stand still. We have to develop, and we have to invest in our infrastructure. The dual carriageway here is a long-term investment project from the council that has received widespread support in the city, in the region, and from the strong business case that we put to ministers and the Department for Transport.
"Our city’s case was backed by the government with a major allocation of funding. Now, working closely with our main contractor Esh Construction we are breaking new ground and once again improving our city's connectivity.”