John Horrocks Way is the official name for the new Penwortham Bypass, which is due to open early next year and will reduce traffic through the town.
Born in 1768, John Horrocks was one of the leading figures in Lancashire's textile revolution. His company had several mills employing thousands of people.
John lived in Penwortham and represented Preston as MP.
After his death in 1804, his company continued to operate, creating the Centenary Mill on New Hall Lane in Preston, which still stands today.
The new name was suggested by Grace Shields and Laura Gillett from Penwortham Girls' High School.
It was officially announced today (Wednesday 11 September) at South Ribble Borough Council's cabinet meeting.
The new road, which is due to open early next year, is being built by Lancashire County Council, as part of the Preston, South Ribble and Lancashire City Deal.
It will help to reduce long-standing congestion in the centre of Penwortham, which has affected people's journeys for many years.
County Councillor Keith Iddon, cabinet member for highways and transport, said:
"Lancashire is well-known around the world for its cotton mills, so it's fitting that John Horrocks who lived in Penwortham will be remembered with our new road.
"We were keen to get local people involved, so we asked schools to come up with interesting names for the new road especially with a local connection. We're really pleased with this suggestion."
Councillor Paul Foster, leader of South Ribble Borough Council, said: “I am delighted that, after two decades of talks and planning, we are seeing the Penwortham Bypass come to fruition – a vital bit of infrastructure allowing for better opportunities in Penwortham and alleviated congestion in the area.
“What’s more, the name - John Horrocks Way - is a fitting tribute to a local legend who built Penwortham Hall in 1801; was a renowned cotton-spinner; and who served as Member of Parliament for Preston in 1802 until his death in 1804.
“We hope that residents are pleased with the new road and the opportunities it brings.”
Schools in Penwortham were invited during the summer term to ask their students to submit name suggestions for the new Penwortham Bypass.
A naming challenge was also run at Penwortham Girls' High School during the Futures Days in July, as part of the Apprentice Factory Project.
The students proposed naming the bypass after John Horrocks to remember his work and to educate people who are unaware of the role he played in development locally.
The aim of the new bypass is to remove traffic through the centre of Penwortham by providing a new route from the A59 Liverpool Road at Howick Cross to the A582 Broad Oak Roundabout.
Traffic is expected to reduce by around 22,000 vehicles each day through the centre of Penwortham, once the bypass has opened.
The new Bypass and the related road layout changes in the town are part of the City Deal. This is an agreement between Lancashire Enterprise Partnership and Preston City Council, South Ribble Borough Council and Lancashire County Council, along with central government and Homes England.
The City Deal will help to create more than 20,000 new private sector jobs and see over 17,000 new homes built across the area, along with new school places, open green spaces and new health provision to cater for the growing population.