The Woodville to Swadlincote Regeneration Route is being built to facilitate housing development on former open cast mine workings.
Derbyshire County Council is working in partnership with South Derbyshire Dales Council to open up the land adjacent for development.
The first section of the new link road has already been constructed as part of the Woodville Woodlands housing development, taking traffic from the A511 Ashby Road to Occupation Lane. The remaining section completes the link from Occupation Lane to the A514 Swadlincote Road.
When the contract was put out to tender earlier this year, the estimate contract value was £8m. NMCN saw off seven other bidders with a winning price of £5,499,000.
Construction is expected to take 10 months.