Transport minister Sadiq Khan announced a funding package of £4.6m for a new bridge to be built over the River Derwent in Workington, Cumbria.
The new two-lane, 350-tonne bridge will be erected around 200 metres east of the former Northside Bridge. The funding will cover material, design and construction costs and the new bridge is expected to be open by May 2010.
Construction firm Morgan Est was appointed following a competitive tender.
The Government has already paid for the Barker Crossing temporary foot bridge, additional rail services and the cost of supplementary short-term project management resources.
Khan said: "The building of this bridge will be a vital step in reuniting the town and will make life easier for local residents and businesses who are still recovering from the devastation caused by last year's flooding. We will continue work with Cumbria County Council to identify what further funding is required to restore the area's critical infrastructure."