The often-controversial road is getting a long-awaited coating of bitumen along its full length after an $8.3 million upgrade has been given the green light.

A $5.8 million grant from the federal government will be added to the $2.5 million from Wagga City Council to seal the five-kilometre road.

In addition, a roundabout will be built at the intersection of Holbrook and Dunns roads and a dedicated right-turn lane at the intersection of Dunns Road and the Olympic Highway.

Solar-powered "intelligent traffic lights" will also be installed to warn drivers of changing conditions.

Work is expected to begin in early 2020 and completion is due by mid-2021, weather permitting.

Deputy Prime Minister and Member for Riverina Michael McCormack and Wagga mayor Greg Conkey announced the $5.8 million in funding from the federal government on Thursday.

It comes after the government in 2016 initially pledged $2.5 million towards an upgrade, an offer Wagga City Council did not take up because of the project's total cost.

"Dunns Road is an important shortcut between the Olympic Highway and Holbrook Road just south of Wagga, which currently alternates between dirt and sealed surfaces," Mr McCormack said.

"In 2016, during the election campaign, the federal government pledged $2.5 million to fix it, but we needed more money than that. There were various things that we had to go through in order to get the community on side, in order to be able to do the job properly.

"This is great news for the residents of Uranquinty, great news for people in Wagga, who've told me this is a very dangerous road.

"I have to say, that having committed that amount of money in 2016 - and yes I appreciate that these things do sometimes take a bit of time and effort to get all the necessary paperwork done, all the necessary protocols put through - but I was very worried when a woman had an accident on Dunns Road because it's a stretch of road that can claim lives.

"I hope the speed limit for the future is fit for purpose. I'm sure that it will be.

"Even though we're committing this amount of money today, it's not going to take out all the dips and all the crests. I do want to urge drivers using this particular road to take caution, to make sure that when they do drive on Dunns Road, they do so safely and they drive to conditions."

Mr McCormack said construction of the Kapooka Bridge and associated upgrade work could mean Dunns Road would not to be as busy as it once was, it "still needs sealing".

Councillor Conkey, who in October 2018 questioned whether Dunns Road should be a priority for council because it was used by just 380 cars a day, has now welcomed confirmation of the federal commitment to the upgrade.

"Council has been doing the necessary groundwork to prepare for this much-needed upgrade for the past few years," he said.

"This includes engaging independent consultants to undertake an in-depth study, reviewing the existing design for Dunns Road and determining the scope of works required to upgrade it.

"We've also looked at traffic flow-on effects of undertaking the upgrade and listened to the views of nearby residents and the wider Wagga community.

"From my point of view, it's a very, very dangerous intersection with Dunns Road and the Holbrook Road and to get a roundabout at that intersection is great news. It's a very dangerous intersection, probably one of the most dangerous intersections in this city."

Cr Conkey said the announcement would be welcomed by people from Uranquinty, The Rock and other communities.

Deb Bewick, president of the Uranquinty Progress Association, described the announcement as "fantastic".

"There will be a lot of people out our way who will be very pleased to hear this. It's a good result, not just for the people of Uranquinty, but lots of others as well," she said.

Ms Bewick said residents had been campaigning for an upgrade for years.

It has, at various stages, been closed because the condition of the gravel had deteriorated and council was concerned about the cost of repairs.

"At one stage they even closed it and put gates up, but then everyone ended up with a key and they eventually gave up on that," Ms Bewick said.