The controversial scheme has been the subject of two special meetings of Athenry/Oranmore councillors in recent weeks.
Athenry/Oranmore councillors have agreed to put the plan on hold pending further discussions between the county council and Transport Infrastructure Ireland.
Councillor Martina Kinane claims TII has not taken on board the concerns of residents or the local business community.
She says the proposed scheme will threaten the viability of local businesses.
The project will not progress to the planning phase until further discussions take place.