A major roading project which will extend the southern end of Hamilton, linking Frankton to Tamahere, is a step closer.

The New Zealand Transport Agency (NZTA) and Hamilton City Council have agreed to fund a $7.5 million investigation into the proposed Southern Links transport project.

The project involves 32 kilometres of new road including more than 20km of state highway and 11km of roads in the newly developing Peacocke's area.

When completed, the $333m project would link State Highway 1 from Kahikatea Dr to Tamahere in the south, and SH3 from Lorne St to Hamilton International Airport.

NZTA would pay $5.25 million of the $7.5m investigation with the council footing the rest of the cost.

The money would be spent on extensive site investigations, including community consultation, to determine the best routes and design options for the proposed new roads.

Investigations would also take into account the region's FutureProof strategy which aims to best manage land use and plan regional growth and key infrastructure.

NZTA Waikato-Bay of Plenty state highway manager Kaye Clark said the investigation stage was an essential step toward the Southern Links project, securing future design and construction funding.

It also meant the transport corridors could be secured and designated, meaning they would be allowed for in future land-use planning.

The total construction cost of Southern Links has been estimated at $333m and, at this stage, is set to begin in 2022.