The money will be used to buy land for the Atwater-Merced expressway.
The project will expand a nearly two mile stretch of Highway 99 in the Atwater area to six lanes and will replace the existing Buhach Road interchange.
The funding from the California Transportation Commission means the expressway will also be eligible for about $50 million in construction money.
The Merced County Association of Governments will try to get approval for construction later this year.
The work could begin next spring.
