The New England Highway is part of the inland Sydney to Brisbane corridor and the National Land Transport Network. It is a major freight and passenger route, carrying 26,000 vehicles, including more than 3,700 heavy vehicles, each day.

Under the existing alignment, the New England Highway passes through the centre of a number of towns, including Muswellbrook. There are nationally significant problems associated with congestion and safety along the highway, as outlined in the New England Highway upgrade listing on the Infrastructure Priority List.

The Muswellbrook Bypass project aims to address existing problems through the development of a bypass of Muswellbrook to the east of the town and Skellatar Hill, starting near Milpera Drive and re-joining the New England Highway north of Sandy Creek Road. 

The Australian Government has committed $268.8 million, and the NSW Government has committed $182.8 million to the project.