The £150 million scheme aims to create a new 85km road running from New Buildings, via Strabane, Newtownstewart, Omagh and Ballygawley and terminating near the border at Aughnacloy.
Construction stalled on the project earlier this year after judicial proceedings were launched by umbrella opposition group the Alternative A5 Alliance.
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The DfI has since pledged its commitment to the project.
Sinn Féin MP Órfhlaith Begley welcomed the progress: "I welcome confirmation that the Department will submit a new application for the A5 road.
"This groundbreaking project will undoubtedly improve connectivity across the north west and create direct links to Dublin.
"Recent fatalities on the A5 have once again reflected the need for enhanced infrastructure to improve road safety on one of the most dangerous roads in Ireland.
"Sinn Féin are committed to the achieving social development and the economic regeneration of the north west and the A5 is key to delivering this."
(CM)
