The latest stage will go to tender in the coming months after the completion of an independent review of the environmental impact of the proposed road.

Orange City Council is working on plans to build stage three of the SFR from Elsham Avenue to the Mitchell Highway.

The two kilometre section of the road follows the path of Dairy Creek Road, alongside the Leewood Industrial Estate, to create a new intersection with the highway.

The Review of Environmental Factors (REF) was completed by Orange-based consultants, Premise.

MAP: Which section of the new SFR will go to tender?

According to the consultants' report the assessment demonstrated the activity as proposed would not have a significant effect on the environment.

Orange mayor Cr Reg Kidd was pleased to see progress on the road project, adding expanding on an existing road meant the environmental impact on the Diary Creek Road area would be "minimal" .

"The REF is a key element of any major road project like this," Cr Reg Kidd said.

"It means an independent expert has cast a critical eye over the project looking for any potential problems around topics such as noise, heritage, groundwater and other environmental issues.

"It's expected there will be some minor loss of trees, we're looking at steps such as saving the large tree trunks, which have nesting hollows, to use in a new location," he added.

Cr Kidd said when completed the SFR will deliver a high quality link between the highway on Orange's eastern outskirts through to a key industrial estate, the health precinct and the new Shiralee housing area as it too continues to develop.

The Federal Government invested a total of $6.45 million into the SFR project and Member for Calare, Andrew Gee believes the improvements will ensure more efficient, more reliable and safer heavy vehicle routes in South Orange.

"I've had excellent feedback from the community and they are really looking forward to the project progressing to the next stage," Mr Gee said.

Discussions are being finalised with the RMS about the design of the intersection between the new road and the highway.

The road will also include intersections with Kurim Ave, Lone Pine Ave and Calton Road. Work is expected to begin this year.