Senator Bridget McKenzie has revealed the money was included in the government’s national highway upgrade program, but the exact amount to be released to Indigo Council in the 2017-18 financial year was still to be confirmed.

Both truck drivers and Rutherglen residents were desperate for an alternative route round the town so B-double trucks did not have to travel through the narrow Main Street.

Indigo mayor Jenny O’Connor welcomed news of the funding, which will be combined with $2 million already committed by the Victorian government.

“We’re very hopeful that money will be released,” she said.

She said $600,000 to $800,000 of the total $4 million project would be spent on an “origin to destination study”, looking at the exact route of the bypass.

The majority of the money will be spent on infrastructure works, as it is released by the government.

Moira Council has emerged the big winner from the roads to recovery funding program, allocated $3.58 million over the next 12 months.

Wangaratta will receive $2.26 million, Indigo $1.61 million, Benalla $1.37 million, Alpine $1.06 million and Wodonga Council will receive $862,212. The payments are only made to councils after they provide receipts proving the works have been completed. 

Senator McKenzie said infrastructure spending was a highlight of the budget and the Rutherglen bypass planning, along with $100 million for the North East rail line upgrade, was significant for the area.

“I know the residents of Rutherglen will be delighted that this included in the budget, they have been keen to get funding to plan a bypass for some time,” she said.

“The congestion through Rutherglen is an issue for not just traffic flow, but also road safety as the amount of produce leaving the area increases.

“Getting the planning done is an critical first step.”