A Portland road project will receive a $22.4 million federal grant to help reconnect the Libbytown neighborhood that was divided by the construction of Interstate 295 in the 1960s.

The project calls for construction of a roundabout on outer Congress Street, near Exit 5 of I-295 and a former Denny’s Restaurant that was purchased by the state and torn down last week.

The Maine Department of Transportation and the city of Portland sought the grant through the Reconnecting Communities and Neighborhoods Program of the U.S. Department of Transportation.

U.S. Rep. Chellie Pingree, D-1st District, announced the funding award for what she called “long-overdue improvements.”

“For decades, the Libbytown neighborhood has been cut off from the rest of Portland and unfairly stunted by unsafe infrastructural barriers,” Pingree said in a statement Tuesday. “MaineDOT’s project will make Libbytown safer and will help reconnect the neighborhood with Portland’s growing community.”

The project’s total cost is $28 million, with the state DOT and the city each kicking in $2.8 million, according to the grant application.

Libbytown is one of the city’s oldest neighborhoods, named for tavern keeper George Libby and his descendants, who settled in the area in the early 1800s, the application states.

Known as Libby’s Corner, the intersection of Congress Street and Park Avenue was the center of a small but thriving district of more than 15 businesses and 200 families when it was severed by the highway and its cloverleaf interchanges.

The project is designed to significantly improve the way residents and visitors get around the neighborhood and reach nearby schools, grocery stores, medical facilities, pharmacies, restaurants, museums, entertainment and recreation, according to the grant application.

The project calls for numerous transportation-related connectivity improvements in the neighborhood, including construction of a “modern roundabout” at Congress Street and Park Avenue that would slow motor vehicle traffic as it passes beneath I-295.

The project also would restore two-way traffic to Congress Street and Park Avenue, which are now one-way streets. Improved traffic lights, signs, crosswalks, transit stops, bike lanes and pedestrian features also are planned.

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