The government will provide nearly £57m towards the cost of the 3.5-mile Hastings-Bexhill link road, which should be completed in 2015.
It wrote to East Sussex County Council (ESCC) on Tuesday to let it know the funding had been formally agreed.
Anti-road activists were evicted from trees and tunnels in Combe Haven Valley near Crowhurst in January.
Opponents of the scheme claim the road will destroy the valley and is a waste of taxpayers' money.
Sussex Police said 28 people were arrested over the protests.
'Homes and jobs'
Provisional funding for the road was approved by the Department for Transport in March 2012. The remainder of the money is being provided by the local authority.
Transport Secretary Patrick McLoughlin said: "This scheme will kick-start economic regeneration in a deprived area of south-east England and tackle problems of accessibility between the towns of Bexhill and Hastings.
"It will open up 52,000 square metres of land in north-east Bexhill for business development and housing and creating new jobs."
Greg Barker, MP for Bexhill and Battle, said he had been campaigning for investment in the county's outdated and overloaded roads since he was elected in 2001.
He added: "The link road will ensure that we can also deliver the new homes and new jobs that our area desperately needs, and in a way that is sensitive to the environment. This package spells growth for our local economy. "
The new road will link the A259 and B2092, crossing Combe Haven Valley near a site of special scientific interest.
Work is expected to start this May and the road should be completed in 2015.
Via www.bbc.co.uk/news/Sussex
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