Cambridgeshire County Council are backing plans for a new £30.7m by-pass for Ely.
The plans would see a 1.7km long single carriageway by-pass spanning the River Great Ouse and rail lines joining Stuntney Causeway to Angel Drove
The council's cabinet confirmed its backing for the scheme this week despite concerns over its environmental impact.
The cabinet considered five alternative schemes including a £30.8 million underpass.
The by-pass could be open by the end of 2015 and the next stage will be detailed public consultation with a planning application to be made in the new year.
Cambridgeshire County Councillor Ian Bates, Cabinet Member for Growth and Planning, said: “Ely is a thriving area but currently the route through by the station is strangling traffic flow and the economy and this is set to get worse as the level crossing will be shut for much of the time.
"Getting the right solution is a challenge and involves trying to balance intrusion on the local historic environment while relieving congestion and encouraging growth.
"The bypass option B is the most effective in relieving congestion in Ely, provides the best value for money and, by allowing the improvement of the areas around the station, has the greatest additional benefits.
"In contrast the underpass while preserving the heritage setting only achieves the limited transport objective of relieving existing congestion at the level crossing. It would rule out any significant improvement of the station area, has no additional transport benefits, makes no provision for future traffic growth and is poor value for money."
