Intelligent transportation systems (ITS) provide significant added value to road transportation, making the related investments distinctively effective and long-lasting. Moreover, some ITS activities may be eligible for financial support of the European union (EU). That was the way how Estonian Transport Administration and Latvian State Roads worked on the project proposal “Smart corridor Tallinn-Tartu-Luhamaa-Riga E263/E77” (acronym – SMART E263/E77), which was approved by EU program Interreg Central Baltics as CB891 project. The project started on June 1, 2020, and its implementation will last till the end of 2022 according to quite challenging schedule. Project activities primarily include numerous installations or road telemetry and telematics devices (especially, variable message signs) for advanced traffic management to be supported by cross-border traffic plans and improvements of traffic control centers. Project target is to provide general travel time savings at least by 0.88% across the whole corridor, however for the motorway-type sections it should reach more than 5.5%. Expected project results will establish new and improve existing functions on the E263 and E77 road transport corridors, namely: traffic management adaptive to variable road conditions; gathering and dissemination of traffic information; decision-making support for road maintenance operations (especially in winter). This report will summarize the information on project progress with emphasis on traffic management considerations.