Galliford Try has won an £80 million contract to build a 5km dual carriageway between Newton Abbot and Torquay.
The contract, awarded by Devon County Council and Torbay Council is for the A380 South Devon Link Road. it will run between Newton Abbot and Torquay, bypassing the village of Kingskerswell.
The scheme is largely funded by the Department of Transport with support from the councils. The design of the bypass is due to begin this month and construction is set to complete by the end of 2015.
Galliford Try chief executive Greg Fitzgerald said: “We are delighted to be awarded this major and prestigious contract which will result in significant economic and environmental benefits and also improve safety.
“The link road is a great opportunity for us to further strengthen our presence in the South-west, a region where we are well established as a housebuilder.”