A highway to replace the road through the Manawatu Gorge is expected to restore confidence and boost jobs in Palmerston North.

State Highway 3 through the gorge has been closed since April, after two slips fell onto the road.

A new multi-million dollar route will cross the Ruahine Range, and emerge at Woodville. Construction on a new road is scheduled to begin in 2020, with the new road completed by 2024.

Palmerston North MP Iain Lees-Galloway says the infrastructure project is vital to growing the area's economy.

"The link through the Tararua Range is an important one for us because it links us to the Port of Napier, which is obviously an incredibly important route for us."

The Transport Agency announced its choice yesterday, but says it takes time to finish off design plans and get resource consents.

New Central Motor Inn owner Teresa de Vries says she supports the new route, but she's disappointed it's taking so long to get anything done.

"The town's dead. At night you could shoot a gun down the street and you wouldn't hit anybody you know, once it was a little, bustling, busy little town."