A bypass of the A469 could be built between Pontlottyn and New Tredegar after the Welsh Government approved funding for a feasibility study.
The move comes after the section of road was closed for eight weeks after underground movement meant major work needed to be carried out.
Cllr Tom Williams, Cabinet Member for Highways, said: “This positive news will be welcomed by the whole community in the Upper Rhymney Valley who experienced so much disruption during the recent road closure.
“I have been working closely with Huw Lewis AM and the local ward members to stress the urgent need for this study and we fully welcome this funding announcement by Welsh Government.
“I would like to thank the minister for listening to our concerns and giving such a clear commitment to this project.”
Although substantial work was carried out on the road by Caerphilly County Borough Council and Welsh Water, there are serious concerns about the long-term viabillity of the route.
Council officers will prepare detailed engineering options for consideration by the council and Welsh Government after Edwina Hart, the minister responsible for transport, confirmed funding had been made available to get the project off the ground.