The construction on Mystery Road Upgrade is set to link up cotton growers in the areas surrounding Caroona in the Liverpool Plains, with the Carroll Cotton Gin in the Gunnedah Shire.

The $3 million upgrade has been funded through a $2.25 million contribution from the NSW Government Resources for Regions fund.

Gunnedah and Liverpool Plains Shire Councils have both made contributions to the project: $515,000 and $250,000 respectively.

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The road was identified as a key freight corridor under the Namoi Unlimited Joint Organisations' (JO) Road Network Strategy.

To mark the occasion, an official sod turning was held at the Mystery Road site.

Tamworth MP Kevin Anderson, mayors Jamie Chaffey and Andrew Hope and council staff turned the very first sod.

The project should be completed in the middle of the 2020/21 financial year.