Sydney residents are up in arms over a proposed six-lane interchange linking the existing M5 at Kingsgrove with St Peters, with locals fearing the tunnel will dump thousands of cars on already-congested local roads.

On Tuesday, the state and federal governments announced a landfill site in Alexandria would be purchased to serve as as interchange for the six-lane M5 to be built between 2016 and 2019.

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According to a Fairfax report, 80 homes in the St Peters area will be acquired for widened roads, with many residents baffled at how already-congested local roads could accommodate traffic from the new motorway.

The St Peters Town and Country pub made famous by Slim Dusty’s song Duncan will also be acquired and demolished.

Newtown Precinct Business Association president Mark Ely told Fairfax the tunnel “would effectively kill King Street”, an already busy main road in the inner-city suburb.

“It would make King Street into another version of Parramatta Road as it is now,” Mr Ely said.

“We all know that Parramatta Road 50, 60 years ago was Sydney’s premier shopping strip. And then the car came along and the car got precedence and the clearways were introduced, and bang: Parramatta Road died.”

NSW Premier Mike Baird defended the project, saying it was “short-term pain for long-term gain” and that it would be a winner for everyone in the long-term.

The NSW government argued the new road network was needed to serve as the main link to Port Botany as well as to handle traffic travelling to Sydney airport.