Cheshire East Council says plans to improve the A500 corridor and connections to Crewe railway station will no longer receive the government funding needed to deliver the scheme.
In a statement issued on 9 October, the council said the Department for Transport had removed the project from the Major Road Network programme.
The authority will now assess the financial implications and whether any elements of the scheme can still be delivered.
Revised plans after HS2 cancellation
The council said the proposal was a more affordable alternative to the original A500 dualling scheme, which was linked to HS2 and lost following cancellation of the railway's northern leg in 2023.
The revised scheme aimed to improve journeys for people walking, wheeling, cycling and driving, as well as links to Crewe station.
Councillor Mark Goldsmith, cabinet member for highways and transport, described the funding decision as deeply disappointing for Crewe.
He said the A500 was an important gateway for residents, businesses and investors, and that the withdrawal created an additional financial challenge for the council.
Alternative funding to be explored
The authority says it will continue working with government, businesses and regional partners to seek investment in Crewe.
Goldsmith said the new combined authority's transport powers and funding could offer alternative opportunities, although no replacement funding has been confirmed in the statement.
The announcement concerns removal from the government funding programme. The council has not yet concluded that every part of the proposal is permanently abandoned.
Background on the scheme is available through Cheshire East Council's A500 project page.