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The two-lane road will connect hundreds of thousands people from Sydney’s south-western suburbs to the upcoming airport.
Over 22,000 vehicles travel along the heavily-congested Fifteenth Avenue every day.
A further 63,000 additional people are forecast to be living in the area by 2041.
Albanese said the investment will ensure western Sydney is a “gateway to the rest of the world”.
“We want it to thrive as the engine room for jobs, economic growth and opportunity,” the PM said.
“This half a billion dollars’ worth of new funding from the Australian government is part of our commitment to delivering more resilient infrastructure for all Australians.”
Minns described the upgrade as a “game changer” for Western Sydney which will open up jobs and unlock housing potential.
The suburbs notorious for having the worst carparks for bumps and scratches
The federal and state government will give $500 million each to the road upgrade.
The Minns government has also promised a rapid bus connection between the new airport and Liverpool CBD by 2026.
Leppington MP and former Liverpool councillor Nathan Hagarty said the announcement was “massive” for the region.
“Christmas has come early in Leppington,” Hagarty said.