Design is set to start on a new stretch of the Sterling Highway around Cooper Landing after the state and federal agencies in charge of the bypass — formally known as the Sterling Highway Milepost 45-60 project — signed a record of decision Friday, officially choosing the Juneau Creek alternative that would run through the hills above Cooper Landing.

The Juneau Creek option was selected over other possible highway reroutes that would have been closer to the Kenai River.

Design is expected to finish by 2021 and construction to last until 2025, according to a timeline in the environmental impact statement the two agencies — the Federal Highway Administration and the Alaska Department of Transportation — signed on March 7.

“However, that (schedule) is dependent on funding,” the impact statement said.

Design engineering is expected to cost about about $25 million, according to a cost estimate for the Juneau Creek route. The total project cost is estimated about $250 million.

The Sterling Highway route through Cooper Landing is essentially unchanged since the road was built in the 1940s and 1950s, the state said in Friday’s announcement. The state Department of Transportation has been looking since the 1970s at improving the route, which sends traffic through the commercial area Cooper Landing at a reduced speed.