Hereford’s Edgar Street Grid project, including the first part of the link road, is among 20 projects to be given regional funding, meaning it is to escape the worst of the government cutbacks.
This is largely because 90 per cent of funding will be met from private-sector investment.
Similar treatment is expected for phase two and three of the half-mile highway from Edgar Street to Commercial Road.
ESG chief executive Jonathan Bretherton has written to all businesses on the road’s route.
The ESG board has decided to delay negotiations with businesses located within phases two and three of the road, from Widemarsh Street to Station Approach, and concentrate on long-term discussions about suitable relocation sites.
He said: “Whilst there are no guarantees, Advantage West Midlands, shortly to be replaced by a Local Enterprise Partnership, has said ESG is one of its 20 highest-priority projects.”
Mr Bretherton added: “Government confirmed that it would look at ways for councils to benefit from increased business rates and council tax revenues associated with new development.
“ESG has been working on this in anticipation of such an announcement.”
The link road is seen as important part of the ESG jigsaw, for job creation and improving communications, with £650 million private backing.
Phase one, from Edgar Street to Widemarsh Street, is still intended to proceed next year as planned.
Herefordshire Council has begun talks with neighbouring local authorities on the formation of a Local Enterprise Partnership.
Herefordshire council leader Roger Phillips said: “We are talking with neighbouring authorities and hope to give Herefordshire a chance to redress the imbalance between local wages and those elsewhere. We need more power in the hands of local government to focus investment.”