The improvements have been made to two adjacent junctions; Scalby Road/Woodlands Drive and Scalby Road/Stepney Drive.
Since completion in August, the public raised concerns about the lane merge on Scalby Road north of Woodlands Drive, the proximity of the bus stop and the island intended to protect cyclists re-joining the carriageway from the shared footway.
Many drivers had complained that the lane merge meant vehicles in the two lanes were vying for position as it becomes one lane, with reports of near-misses.
This is the third of four major junction improvements that form a £4m scheme in the town which saw the creation of additional approach lanes and improved traffic signals.
North Yorkshire County Council highways team put interim measures in place while a permanent solution was agreed.
The final design involved extending the shared cycleway northbound on Scalby Road and allowing cyclists to re-join the carriageway nearer to Lady Edith’s Drive junction.
County Councillor Andrew Jenkinson, of the Woodlands division, said: “I’m grateful that a solution has been found to address the concerns raised by the public.
"Despite this setback, it has been a hugely successful project which ensures the junction is fit for the future.”
County Councillor Don Mackenzie, Executive Member for Access, added: “I would like to thank the public for sharing their views and our designers and contractors for swiftly addressing safety concerns.
"This will create a safer environment for cyclists and provide more space for vehicles to merge.”
The first two phases of the improvements were completed in 2019 on the Scalby Road/Manor Road junction, and the Stepney Road/Stepney Drive/Sandybed Lane junction.
Work on the final phase at Stepney Road/Falsgrave Road roundabout is scheduled for late winter/early spring 2022. All work is expected to be completed by spring 2022.
In their original layout, each junction was expected to reach capacity by the end of the Local Plan in 2032.
The County Council and Scarborough Borough Council are working in partnership on the scheme, contributing £150,000 each, with the bulk of the funding coming from the York, North Yorkshire and East Riding Local Enterprise Partnership, plus developer contributions.