Adelaide motorists will be able to travel non-stop between Gawler and the River Torrens after the South Australian and federal governments reached a funding agreement on a missing link to the north-south road corridor.

Work on a 1.8-kilometre six-lane motorway from Pym Street to Regency Road will begin next year.

The project would include an overpass sending South Road traffic over Regency Road, as well as an east-west overpass bridge for pedestrians and cyclists at Pym Street.

The two governments agreed to split the $354 million cost on a 50-50 basis.

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The pre-budget announcement came just hours after Infrastructure Australia approved a business case for the road upgrade, stating it could deliver $624 million of economic benefit over 30 years.

The business case was submitted by the former Labor state government last June along with a proposal to fund the rest of the long-awaited Gawler rail line electrification.

$83 million of state taxpayers' money was committed to the road upgrade in the last state budget.

But neither proposal was approved in Infrastructure Australia's most recent list of priority projects released before the state election in March.

Federal Infrastructure Minister Paul Fletcher said the Marshall Government had "moved quickly to seek an agreement with the Turnbull Government". ( ABC News: Nick Haggarty )

Federal Infrastructure Minister Paul Fletcher said the Marshall Government had "moved quickly to seek an agreement with the Turnbull Government".

But he did not directly answer when asked whether federal cabinet had approved funding for the project prior to Infrastructure Australia's assessment.

"Of course business cases come to Infrastructure Australia and are assessed," he said.

"The sequencing of when the assessment is announced is not necessarily the same timing as when the decision is made.

"But the key point is that the business case has been assessed in the ordinary way, consistent with the Turnbull Government's processes."

The Federal Government repeatedly argued that business cases must be assessed before decisions on funding can be made.

But in recent weeks the Prime Minister has announced billions of dollars for infrastructure projects in Queensland, Victoria and Western Australia without completed business cases.

Minister Fletcher denied that represented a breach of the Government's own rules, saying those projects were contingent on a business case being completed.

"There's been no change to the Turnbull Government's processes, it's a standard requirement that funding for any project requires an assessment, a business case to be assessed by Infrastructure Australia so that is a condition that attaches to funding announcements," he said.

'Paying too much', Opposition says

Shadow Transport Minister Tom Koutsantonis said the State Government was spending far more money than it should on the project.

He said it should have fought for an 80-20 funding split, rather than sharing costs equally.

"It's good that we've got that part of South Road done, we're just paying too much for it," he said.

"So much for Steven Marshall's special relationship with Canberra — it seems that 'special relationship' means we have to pay more."

The project also means more property acquisitions along South Road.

Croydon Park cafe manager Arturo Garuccio said his team would have to "cop it on the chin".

"It's going to be a struggle when it comes up — we're looking to find a new location," he said.

"We might lose a few walk-ins and the driving traffic, but maybe gain the [road] workers that come in."