The scheme aims to protect 129 properties at risk of flooding by completing a number of different works.
In this phase, work will take place to replace a culvert between Lochlann Court and Redburn Avenue and create flood storage areas in Culloden Park and Smithton Park. Further works include the removal of a culvert beneath Smithton Park and the removal of a culvert between the railway at Murray Terrace and Smithton Park.
The Scottish Government is funding 80% of the project with The Highland Council providing the remainder.
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Vice Chair of the Council's Environment, Development and Infrastructure Committee and local Ward Councillor, Trish Robertson said: "The Council gave a commitment to do all we could to reduce flood risk in the area and these new site works once complete will be key to making the community safer from potential flooding."
Morrison Construction Managing Director Infrastructure Scotland, Jim Steele, added: "I am delighted to be here to celebrate this exciting milestone for a scheme that will provide vital flood defences to protect the Smithton and Culloden communities.
"As a local company we have a successful working relationship with The Highland Council and look forward to further collaboration to deliver this important infrastructure.
"Throughout construction we will continue to engage with all stakeholders while creating education and employment opportunities to ensure the project has a lasting positive impact for the community."
The majority of works are expected to be completed by summer 2019.
(CM/MH)
