A. The Commissioner of Highways may acquire by gift, purchase, exchange, condemnation, or otherwise such lands or interest therein necessary or proper for the purpose and may construct and improve thereon such bypasses or extensions and connections of the primary state highway system through or around cities and towns as the Board deems necessary for the uses of the primary state highway system, provided that the respective cities and towns with populations of 3,500 or more by action of their governing bodies agree to participate in all costs of such construction and improvement, including the cost of rights-of-way, on that portion of any such bypass or extension that is located within any such city or town. The maintenance of that portion of a bypass or extension located within a city or town shall be borne by the city or town. However, the Board shall contribute to such maintenance in accordance with the provisions of law governing its contribution to the maintenance of highways, bridges, and streets in such cities and towns. The location, form, and character of informational, regulatory, and warning signs, curb and pavement, or other markings and traffic signals installed or placed by any public authority shall be subject to the approval of the Commissioner of Highways. At both ends of bypasses through or around cities and towns, the Commissioner of Highways shall erect and maintain adequate directional signs of sufficient size and suitable design to indicate clearly the main route leading directly into such cities and towns.
B. Notwithstanding the provisions of subsection A, in any case in which a municipality refuses to contribute to the construction of a bypass or an extension or connection of the primary state highway system within said municipality, the Commissioner of Highways may construct such bypass or extension and connection without any contribution by the municipality when the Board determines that such bypass or extension and connection is primarily rural in character and that the most desirable and economical location is within the municipality. Any bypass or extension and connection built under this subsection shall be maintained by the Commissioner of Highways as a part of the primary state highway system, and the municipality shall receive no payment for such bypass or extension and connection under § 33.2-319.
C. All the provisions of general law relating to the exercise of eminent domain by the Commissioner of Highways are applicable to such bypasses, extensions, and connections of the primary state highway system.
D. The Board may expend out of funds appropriated to the Board and allocated to an applicable project under § 33.2-358, 33.2-370, or 33.2-371 such funds as may be necessary to carry out the provisions of this section.