MINISTER for Roads and Freight Duncan Gay and Member for Lismore Thomas George announced on Tuesday the New South Wales Government would spend $2.38 million to upgrade sections of Mount Lindesay Rd between Legume and Woodenbong.

"This is an important project for the communities and businesses of the Tenterfield and Kyogle shires, being a vital transport and road freight link for the entire region," Mr Gay said.

"This investment provides a wonderful opportunity to partner with Tenterfield Shire Council to deliver much needed upgrades to Mount Lindesay Rd."

Tenterfield Shire Council will contribute $600,000 to the project, bringing the total cost of the Mount Lindesay Rd upgrades to almost $3 million.

Mr Gay said this was an example of the NSW Government partnering with local councils to deliver vital transport and road freight infrastructure upgrades in country NSW.

"Since April 2011, the NSW Liberals and Nationals Government has provided more than $1.55 billion to councils across the state - city and country - to build and repair local roads, bridges and culverts," he said.

The NSW Budget provided $267.6m for local councils, including Block and Regional Roads Repair Program grants - a 42% increase on 2009-10, he said.

"When natural disaster relief is added to the overall funding equation, councils will benefit from a total of $304.9m from the State Government this financial year," he said.

Mr George said the NSW Government and Tenterfield Shire Council took part in a safety review of Mount Lindesay Rd in May this year which informed the specifications for the upgrades.

"Upgrades will include widening shoulders at narrow sections of the road, new line markings to help better separate lanes of traffic and the removal of vegetation to improve driver visibility of road conditions," Mr George said.

Work to start by the end of the year will focus on sections of the road near Mount Clunie Rd, the entrance to Woodenbong and between White Swamp and Gumdale West.