Work will begin on part of the A5 road between Newbuildings and Strabane next year, the Department of Infrastructure has announced.
The 15km stretch of road will cost an estimated £150m.
The Irish government has agreed to contribute £75m over a three-year period.
When complete, the new A5 dual carriageway will run for 85km (53 miles), between Newbuildings outside Londonderry and Aughnacloy in Tyrone.
The department's permanent secretary Peter May said work will get under way early in 2018.
He said the decision to proceed with the A5 "concurs with the Planning Appeals Commission recommendation that the scheme should proceed in the wider public interest".
"In proceeding with the scheme, the department commits to carrying out the necessary actions to implement the PAC recommendations and mitigation measures as described in the department's statement and the environmental statement.
"Construction will start as soon as possible," he added.
The story of the A5 so far:
- The preferred route for the A5 was announced in 2009
- An inquiry was ordered in May 2011 into the environmental impact of the scheme
- The Irish government reduced its funding for the project from £400m to £42m in November 2011
- A public inquiry into the road was found in favour of the scheme going ahead in July 2012
- The project stalled again in 2013 due to a ruling by the High Court
- The Irish government said in 2014 it would review its decision to withdraw funding
- In November 2015, following the Fresh Start Agreement, the Irish government said it was ready to provide £75m towards the A5
Mr May said the A5 "is a strategically important project for the region and one which will benefit the economy as a whole".
The department said further phases of the A5 scheme - from Strabane to the Irish border at Augnacloy - will be built, subject to funding.
The preferred route for the A5 was announced in 2009. When complete, it is understood it would lessen journey times by as much as 20 minutes.