A major upgrade to one of Melbourne's busiest river crossings has angered long-time residents, who face having highway lanes paved at their doorsteps in order to save trees, time and money.

Hundreds of homes in Alphington will have a new six-lane highway run along their property line under a VicRoads preferred design option to upgrade the Chandler Highway, which is ranked among the city's worst for traffic congestion.

The decision came as a shock to nearby homeowners, who thought the new lanes would be paved on the other side of the road, where the former Amcor paper mill sits as vacant land earmarked for future infill development.