The decision on the same was taken at the Cabinet Committee on Economic Affairs (CCEA) meeting, chaired by Prime Minister Narendra Modi.
The CCEA has given its "approval for development of four laning from 'end of Pandoh Bypass to Takoli' section of National Highway (NH)-21 in Himachal Pradesh", the Ministry of Road Transport and Highways said in a statement.
The project will help in expediting the improvement of infrastructure in Himachal Pradesh and in reducing the time and cost of travel for traffic, particularly heavy traffic, plying from 'end of Pandoh Bypass to Takoli' section, it said.
"This work will be done under the National Highways Development Project (NHDP) Phase IV B on Hybrid Annuity Mode," it said.
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The development of this stretch will also help in uplifting the socio-economic condition of this region in the state.
It would also increase employment potential for local labourers for project activities. It has been estimated that a total number of 4,076 mandays are required for construction of 1 kilometre of highway.