The section, from Salt Ash to Bobs Farm, is part of the $275 million bid to duplicate the thoroughfare from Williamtown to Bobs Farm.

NSW Premier Gladys Berejiklian promised the road's duplication in January 2019 on the campaign trail, four years after her predecessor Mike Baird made a similar commitment.

NSW Minister for Regional Transport and Roads Paul Toole said the money had been committed for the project.

"We've already completed the Bobs Farm to Anna Bay section in 2015, the upgrade of the Medowie Road intersection was completed in 2019 and the Lemon Tree Passage Road intersection upgrade was completed in mid-2020," he said.

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Parliamentary Secretary for the Hunter Taylor Martin said confirmation Daracon would be responsibile for this next stage put the project on track to start in late 2021.

It is expected to take about 18 months, he said, and support 100 jobs.

"A total project budget of $26 million has been provided for the Section 1 upgrade, which involves building about one kilometre of dual carriageway, from 900 metres east of Marsh Road at Salt Ash and joining up to the existing duplicated section of Nelson Bay Road at Bobs Farm," Mr Martin said.

The upgrade includes building 3.5 metre travel lanes, 2.5 metre road shoulders, a concrete median to separate traffic, two retaining walls, shifting utilities and fences to keep native animals off the bitumen.

Three route options for the overall upgrade were put forward for in 2020, with responses published in June.

A preferred option report is due to be published later this year.

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