Santa Cruz city council voted Tuesday to move forward unanimously on the roundabout on Pacific Avenue and Beach Street.
Construction won't happen until summer tourist season dies down.
In June, the council approved the bid process, but hadn't yet said it was a done deal.
The project is estimated to cost $1.6 million. Planners said it would have no impact on the general fund.
Santa Cruz County is building a roundabout near Rio Del Mar Beach, also an area that confuses tourists.