The plan calls for building a new freeway lane and interchange to handle the traffic.
Cars would have better access to the mill site and Terrace Heights.
Commissioners say the joint effort should help the work get done faster.
"It's just common sense to combine our efforts, share the cost, and take one proposal forward that we can both support. It makes it easy on the Feds as well. The more jurisdictions you have supporting a project, I think the easier it is for them to make a decision," said Rand Elliot, Yakima County Commissioner.
The county will pay about $1.8 million. The city will cover about $1.1 million.