The new road will upgrade a rough 108-kilometre (67-mile) track that leads to the northern base camp, the official Xinhua News Agency reported.
The construction of the new highway would cost 150-million-yuan (20-million-dollar), and is expected to be completed in about four months.
The road is being constructed to "ease the path of those bearing the Olympic torch. The route will also boost tourism to the base camp area, which is 5,200 metres above sea level," the China Daily said.
According to the organisers, the relay, covering some 137,000 kms, will be the longest ever in the history of the Olympic Games. However, the decision to include Tibet in the torch relay has angered opponents of Chinese rule in the Himalayan territory.
The torch will start its journey from Beijing on March 31, 2008 with an attempt to reach the summit of Mount Everest by May.