A City of York Council report stated the project including dualling the road between the A19 and Little Hopgrove roundabout could still be achieved if its delivery is carefully phased.
The report added the phasing would focus on works to junctions along the ring road, with stages scheduled to support the building of new housing developments.
It comes as the scheme and the redevelopment of the area outside York Station face a combined shortfall of more than £128 million.
The ongoing Station Gateway scheme faces an £18.5 million funding shortfall, with the completion of the current tranche of works delayed by a year as of January, according to the report.
Council estimates put the cost of the Outer Ring Road scheme, which was approved last year, at £164 million compared to £51 million left in the budget for the project.
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An £18.5 million shortfall in the funding needed to complete improvements to the front of York Station has been caused by delays, inflation, contracts and design changes, councillors have heard.
