The $750 million, 25km stretch of road to link Carrum Downs with Mount Martha will not make the list of projects earmarked by Sir Rodd Eddington's Infrastructure Australia advisory board to get immediate funding.
The current road is a traffic nightmare for anyone living in or south of Frankston with peak time queues extending some evenings over five kilometres from the freeway's current termination point in north Frankston.
Motorists then have to battle kilometres of suburban traffic, intersections and lights before emerging on to the Mornington freeway south of Frankston.
The situation has been exacerbated by Melbourne's newest toll-road "Eastlink" also funnelling traffic on to the same two lane road which is also currently plagued by road works.
Some Federal bureaucrats have suggested the Victorian government should fund the project on its own and that it is indeed in a financial position to do so.
Another government source said the bypass did not not tick the boxes necessary to win support, including the capacity to help "nation-build", expand Australia's productive capacity, and reduce greenhouse emissions.
The Victorian government would not comment on the future of the bypass.