Wingecarribee Shire Council has returned to its original plan to install traffic lights at the intersection of Bong Bong and Station Street, after receiving advice that RTA and Federal Government funding for the intersection would not be available for a roundabout.
But council will continue to investigate a roundabout at the site as a matter of urgency, including negotiating with State Rail to acquire land for the required road deviation.
Wingecarribee Shire Council adopted the traffic light plan in December to address safety concerns at the Bong Bong intersection.
Council later agreed to seek funding for a roundabout after protests from the Bowral Chamber of Commerce and members of the public.
However, the RTA has advised that design for the traffic signals has begun and $350,000 in RTA funding for the project can not be transferred to a roundabout.
The RTA funding is conditional on the project being completed before June 30.
Council has also received advice that a further $125,000 in Federal Government Black Spot funding cannot be transferred to other projects.