Member for Albury Justin Clancy on Monday said $5.7 million would be lent on low interest for council works related to easing congestion in the suburb.

There will be $1.2 million for planning and land acquisition and $4.5 million to extend Elizabeth Mitchell Drive from Ettamogah Road to Wignell Road with a roundabout included.

It is an initial step in steering more motorists to access the freeway at Davey Road rather than have them all funnel into Thurgoona Drive.

The move follows the federal government in May opting to join the state in funding southside freeway off-ramps at Davey Road.

"This new road will benefit around 10,000 homes and assist traffic congestion in the Thurgoona growth corridor," Mr Clancy said of the Elizabeth Mitchell Drive extension.

Under the terms of the loan Albury Council will receive a 50 per cent refund on the interest.

That equates to a saving of $425,000 for ratepayers.

The council applied for the funding, which requires a demonstrated benefit to housing supply, in May.

The roadwork has to be completed by June 30, 2021 and the loan repaid within ten years.

Council's other plans for Thurgoona include extending a road east-west from Elizabeth Mitchell Drive to Kerr Road and linking it to Davey Road.

Berrigan Shire has also secured low interest state government loans.

There will be $4 million going towards an expansion of Barooga's water treatment plant and $1 million for drainage and pedestrian improvements around Lewis Crescent in central Finley.

The former is tipped to support 250 new homes and the latter will enable 17 fresh residences.

Berrigan Shire is also providing $472,421 for the Barooga project and $314,272 to the Finley works.