The Toll Bar roundabout on the A16 will be replaced with traffic lights at the junction.
North East Lincolnshire Council’s Cabinet approved the plans at a meeting held on Wednesday, January 31.
The council has said that traffic lights will improve road safety at the roundabout.
A decision was put on hold in November 2017 to consider views from the local community.
Funding for the £2.1 million project will largely be provided by the Greater Lincolnshire Local Enterprise Partnership.
Councillor David Watson, portfolio holder for energy and environment at North East Lincolnshire Council, said: “As councillors we sometimes have to make difficult decisions. And there are few decisions this council has made in recent times that have stirred as many well-informed concerns as the plans for the Toll Bar junction.
“As portfolio holder I asked for the project to be put on hold so I and colleagues could take the time to step back and listen afresh to the arguments both for and against replacing the roundabout with traffic lights.
“My chief concern has always been the safety of pedestrians and other road users and the ability of the junction to cope with more traffic as our economy grows.
“Doing nothing isn’t an option, the junction as it stands isn’t up to the job. If we delay the project further we risk losing the grant funding.
“The advice for the best option in terms of the cost, improving road safety, relieving congestion and increasing capacity is the introduction of traffic lights.
“I listened to the views of the parish councils and the Tollbar Academy, but I’ve yet to hear a convincing argument – backed by hard evidence – for a realistic alternative.
“It’s clear this junction means a lot to people and I’ve been impressed by the strength of the arguments put forward by all sides.”