The Shoalmarra Drive and Mount Low Parkway Intersection upgrade received $1.5 million in funding from the Australian Government's Black Spot Program.
Townsville Mayor Jenny Hill said the roundabout upgrade is one of many shovel-ready projects across the city being delivered by Council.
"Council is dedicated to improving infrastructure right across the city and this project is expected to be completed by the middle of the year," Cr Hill said.
"This project has supported up to a dozen local jobs during the initial design stage and will be delivered by Council's own workforce.
"I'd like to thank the Australian Government for providing the funding for this project."
Assistant Minister to Deputy Prime Minister Andrew Gee said the upgrade is crucial to improve road safety in the area.
"Road crashes can have a devastating impact to members of any community and the Australian Government is committed to funding measures such as this intersection upgrade to reduce the likelihood of crashes at high-risk locations," Mr Gee said.
"Through programs like the Black Spot Program, we are working with local councils to improve safety on roads around Australia."
Senator for Queensland Ian Macdonald said a dual-lane roundabout at the Shoalmarra Drive and Mount Low Parkway intersection will be installed.
"This is a critical piece of work and there will be some road closures and traffic management in place while the project is completed," Senator Macdonald said.
"We want local residents and all motorists travelling in the area to remain safe when travelling on the roads, and the new roundabout will improve conditions at this intersection."
Townsville City Council Infrastructure Committee Chair Cr Mark Molachino said the upgrade is crucial to improve road safety in the area.
"Council crews are going to be installing a dual lane roundabout at the Shoalmarra Drive and Mount Low Parkway intersection," Cr Molachino said.
"This is a critical piece of work and there will be some road closures and traffic management in place while the project is completed.
"We want all residents to remain safe when travelling on the roads and the new roundabout will improve conditions at this intersection."