In a statement to the Scottish Parliament, Transport Minister Keith Brown said building the Aberdeen Western Peripheral Route (AWPR) together with the Balmedie to Tipperty project would cost £900m, including VAT.
The last valuation for the AWPR, in 2008, put the scheme at £347m but costs have since gone up due to inflation and "scope changes", Mr Brown said, pointing to "unwanted delays" caused by a public local inquiry and a subsequent legal objection.
But he was accused of using an "absurd under-estimate" of the project's true cost by Green Party MSP Patrick Harvie, who pointed out construction cost estimates had not been updated in four years.
The Scottish Government saw off a legal challenge to the bypass earlier this month, paving the way for construction of both schemes to get under way in 2014, with a likely completion date of 2018.
Both Aberdeen and Aberdeenshire councils, which are due to fund 19% of the main AWPR project – which does not include a "fastlink" section linking the motorway to Stonehaven –confirmed yesterday they would find the extra money to allow the scheme to go ahead.
In his statement, Mr Brown said inflation had accounted for £230m of the cost increases. He said: "The AWPR is vital for jobs, the economy and improving the transport infrastructure of Aberdeen and the north-east.
"Over the next three decades, the project is expected to bring in an additional £6 billion to the north-east economy and create around 14,000 new jobs.
"The unwanted delays caused by the protracted public local inquiry and legal challenges have resulted in a substantial increase in the overall cost of the project."
As The Herald reported last year, officials in Government agency Transport Scotland warned the then Transport Minister, Stewart Stevenson, in June 2008 that the cost of the AWPR was likely to increase beyond previous estimates which dated back to 2005, when a budget of between £295m and £395m was set.
A memo to ministers the following February recommended carrying out a review of costs but this was not acted upon at the time.
Mr Harvie accused ministers of producing "nonsensical figures". He said: "We've been saying for years that costs the Scottish Government based its decision on were an absurd under-estimate. Even for those who are fans of the SNP's everlasting road-building programme, it's impossible to form a sensible view of the cost/benefit ratio for a project like this on the basis of such nonsensical figures."
However, Aberdeen City Council leader Barney Crockett said: "We realised the cost of the AWPR would be roughly what it now is and we have made adequate provision for that. The economic performance of the area will be underpinned by the AWPR."
Five judges at the Supreme Court unanimously rejected a final appeal by campaign group RoadSense earlier this month.