Federal Budget allocation of further $104 million for McKoy Street intersection in West Wodonga

The unexpected cash boost has been announced as part of the federal budget due to be handed down on Tuesday night.

Prime Minister Scott Morrison made an initial $64 million funding commitment to the project during last year's federal election, but the intersection has been upgraded to "National Road of Strategic Importance" status with the extra cash to ultimately support more than 500 jobs.

The total value of the project is $210 million with the Victorian government also upping its contribution.

"This project is expected to create over 520 local jobs, so critically important right now as the border region recovers from the economic impacts of the bushfires, COVID-19 and the challenges the border closure has brought about," Victorian Liberal Senator Jane Hume said.

Senator Hume told The Border Mail at the weekend another site for the controversial intersection, south of McKoy Street, was being investigated.