The Peel Road roadworks are due to be completed by about the end of April.
Director of highways Richard Pearson said the project was ‘proceeding well’.
Approximately 85 per cent of the kerbs have been laid and about 75 per cent of the carriageway reconstruction has been completed.
Work is currently taking place on the Douglas-bound carriageway on both sides of the junction with Pulrose Road.
Temporary traffic lights are in place, and the road remains open to two-way traffic.
Mr Pearson said: ‘The project was started on March 11 2013 and was initially programmed for 80 weeks.
‘Working with the contractor and benefitting also from the relatively mild winter weather, the project is well ahead of the original programme.
‘Weather permitting I anticipate it will be completed in around 60 weeks, finishing around the end of April.’
He said that the £4.3 million project also remained on budget, and in fact a ‘modest under spend may be achieved’.
‘The utility companies have also been very supportive in working with the department in dealing with unforeseen issues with their apparatus,’ Mr Pearson said.
‘Since the return to two way working before Christmas, traffic congestion has eased and full access to businesses is restored.
‘The department is very grateful for the patience and understanding of the local businesses and residents whilst this much needed road project is being completed.’
The first phase of the project, involved the closure of Pulrose Road for bridge strengthening and junction improvement works.
This main arterial route was made one-way only – for traffic heading into Douglas – while work started on reconstructing the carriageway.
Mr Pearson has previously said that Peel Road, which has had no major repairs for more than 25 years, has ‘demonstrably the worst ride quality of any strategic route in the island’.
‘It really is a switch back,’ he said.
The road surface was severely cracked, the concrete slab sub-base had shifted and there was significant subsidence while there are obvious problems with drainage, too, with the road prone to localised flooding.
The Peel Road scheme is one of the biggest roadworks projects seen in recent years.
Mr Pearson has said the scheme is important for the reputation of Douglas, referring to a survey in 2007 that quoted a senior figure of Barclay’s Bank as saying: ‘The appearance of Douglas lacks the quality of St Helier and comes across as shabby.’
In December Infrastructure Minister David Cretney said the contractor was applying additional resources at the weekend despite not being required to do so in the contract.
It came after he told a Tynwald scrutiny committee weeks could be taken off the scheme if the private contractors worked at the weekend,
He said that in future contracts need to be more tightly negotiated to minimise disruption caused by major road works.