The Deputy Prime Minister for Infrastructure and Regional Development, Warren Truss (pictured, left), recently joined the Northern Territory Chief Minister, Adam Giles (pictured, right), to announce the upgrades, which will see both governments contribute $20 million each.
Mr Truss said the improvements to the route would deliver significant gains on several levels.
"Billed as Australia’s longest shortcut [Cairns to Perth], the Outback Way traverses the most remote parts of Australia and is likely to punch well above its weight in terms of importance to our economy," he said.
"Our regional and remote tourism, mining and freight industries use this route through Western Australian, the Northern Territory and Queensland.
"This funding will help unlock the potential benefits of outback roads to the Australian and Northern Territory economies."
Mr Giles said the upgrade would also provide a major boost to the isolated communities scattered along or near the route.
"This investment is about improving access to our remote communities and increasing the prosperity of these regions," he said.
"The full scope of works is still being considered, but already this financial year construction will begin on extending the sealed length of the Plenty Highway up towards Harts Range. We are also allocating funding for design work on the flood plain crossing on the Docker River Road, which often disrupts traffic."
The General Manager of the Outback Highway Development Council, Helen Lewis, said the improvements will make a vital contribution to outback Australia.
"The works on the Plenty and Docker River Road will be a game changer for locals, tourism and industry," she said.
"The Docker River Road is critical for the connectivity of the route and the integrity of the Outback Highway project."