The state recently allocated $13 million to expand a two-lane portion of highway to four lanes, according to a statement from the president of the Navajo Nation.
"This is a very much needed project," said Patricia Wolff, a spokeswoman for the New Mexico Department of Transportation.
Construction will be between mileposts 41.8 and 46.0. Work is to be completed in May 2014.
Navajo Nation President Ben Shelly met with New Mexico Department of Transportation Cabinet Secretary Alvin Dominguez to thank the state for continuing work that began in December 2009.
"I know funding for infrastructure is becoming more difficult to attain, and costs for construction are rising," Shelly said.
The project is part of a series along the highway, formerly U.S. 666. But it was known to some as the Devil's Highway because of serious accidents.
Two of the already completed stretches were expansions to four lanes. One of the others near Shiprock was a rehabilitation.
"That highway is very important to the tourists, to the Navajo Nation and all of San Juan County," Wolff said.