Highway 407 will get an eastbound extension all the way to Oshawa.
Premier McGuinty announced the project will add 22 kilometres from Brock Road in Pickering to Harmony Road in Oshawa.
McGuinty said the plan has a three year, $1 billion price tag and will create 900 direct jobs.
The province will have to pay back the private sector who will build and finance the project.
McGuinty said the new toll road will belong to Ontarians and all revenue from it will go back to the province.