The Environmental Protection Authority has given the green light to the southern route of the Bunbury Outer Ring Road.
The finalised report which features a range of strict conditions will be open for appeal until November 15.
The Environmental Protection Authority first announced it would investigate the route in 2019.
The authority chair professor Matthew Tonts said the conditions would help further preserve and enhance the habitat of the western ringtail possum and other conservation-significant species.
Main Roads WA proposes to construct and operate the 10.5km Bunbury Outer Ring Road Southern Section through Gelorup within the Shire of Capel.
Professor Tonts said the examination of impacts to the threatened western ringtail possum was central to the environmental assessment.
He said the proponent had designed the freeway to minimise clearing and use already disturbed areas as much as possible, but the authority's conditions would further reduce the impacts.
"To counterbalance the loss of 60.5ha of western ringtail possum habitat, the EPA has recommended that the proponent must acquire and protect about 179ha of existing habitat and create 220 ha of new habitat," he said.
"This includes a substantial rehabilitation program in the Ludlow State Forest to enhance habitat and secure long term benefits for the western ringtail possum and other species.
"The proposal also includes possum rope-bridges and vegetated fauna land-bridges, and the EPA has recommended the proponent be required to monitor the effectiveness of these fauna crossings, in addition to undertaking feral animal control."
Recommended conditions would also require a licensed fauna spotter to survey for black cockatoos and inspect nesting trees before any ground disturbance.
And if any nesting hollows are in use, the proponent will need to avoid a 10-metre radius until after the cockatoos have nested and dispersed.
The authority received more than 640 submissions from the public about the proposed route and as a result it has recommended that an amenity management plan is created.
The plan is to include community consultation regarding the specifications and locations of infrastructure such as screen and noise walls, vegetative screening, landscaping, pedestrian underpasses, walking trails and foot or cycle paths.
The EPA's report to the Minister for Environment is now open for a three-week public appeal period, closing 15 November 2021.
Appeals can be made at https://www.appealsconvenor.wa.gov.au/.
The Minister for Environment will make the final decision on the proposal.