Argyll and Bute Council has been awarded £1.9m from the Housing Infrastructure Fund to upgrade Kirk Road. Work on the road is expected to start mid January.
Chair of the Oban, Lorn and the Isles Area Committee, Councillor Elaine Robertson, said: “I’m delighted that the Scottish Government has agreed funding to upgrade Kirk Road.
“The improvements will make a real difference to the present residents and the local community, and will enable this very important housing development, part of the Dunbeg masterplan, to be progressed.”
The development – by social housing provider LINK – is part of the Dunbeg and Ganavan Masterplan.
Planning consent is still be to be given for the 300 new homes in the first phase.