Contractors have been appointed for the scheme from the M25 to Crawley.
The move allows the hard shoulder to be used on the motorway which carries more than 120,000 vehicles each day, Highways England said.
But the AA has raised concerns and said the "jury is still out" on smart motorways which use technology to control traffic.
The M23 scheme is expected to cost between £148.4m and £211.2m, creating a four-lane stretch from a three-lane section.
Highways England said other smart motorways had a good safety record and officers could respond quickly if people did break down in a live lane.
The spokesman said "environmentally-sound" smart motorways also cost less than widening schemes and they used less land.
But Paul Watters, from the AA, said smart motorways needed to be evaluated after a reasonably long period.
He claimed the Surrey/Sussex scheme would be "permanent all-lane running", meaning four lanes would in operation all the time, and he added: "We need to see how we're faring with those."
Mr Watters added there had been reports of drivers continuing on closed lanes, and surveys had shown people still did not fully understand smart motorways.
He said the scheme was justified because traffic was increasing and the M23 served both Gatwick and the M25, but the AA had concerns about using the hard shoulder - leaving no spare capacity for the future - and about the distance between refuge areas.

Written by Stephen Baxter, The Massacre of Mankind will see the Martians from Wells's story invading Earth once more, having learned from the mistakes they made first time around.
Gollancz will publish the sequel in hardback and eBook on 19 January 2017.
The copyright on the original, which was published in book form in 1898, lasts until 31 December 2016.
In a statement, Baxter said it was "an honour... to celebrate [Wells's] enduring imaginative legacy, more than 150 years after his birth."
The author of more than 20 novels previously penned The Time Ships, a sequel to Wells's 1895 story The Time Machine.
"Steve has a great track record of collaborating with other authors," said Marcus Gipps, commissioning editor at Gollancz.
"I've seen early material from this remarkable new project and can't wait to unleash Steve's new Martian terror upon the world."
The lucrative film rights to the novel will also certainly be hotly contested after a 2005 film, starring Tom Cruise and directed by Steven Spielberg, earned nearly $600m at the global box office.

On Wednesday, a leaked document revealed a private-public sector consortium was the last remaining bidder for a Â£690m contract.
Campaigners handed over their petition at a clinical commissioning group (CCG) meeting on Thursday.
Commissioners said their focus was on improving outcomes for patients.
Speaking at a protest outside the NHS meeting in Hednesford, Gail Gregory, from the Cancer Not For Profit campaign group said the Staffordshire service should be run by the NHS.
"A private company is out to make a profit. That's what you want a private company to do. I'm not a profit opportunity, I'm a patient," she said.
Outsourcing contracts to cover both cancer and end of life care in Staffordshire were announced last year. Together, they are expected to be worth Â£1.2bn and cover a 10-year period.
The contracts will cover the areas controlled by Stafford and Surrounds, Cannock Chase, Stoke-on-Trent and North Staffordshire CCGs.
The cancer contract is expected to be awarded in December and, according to a leaked document seen by the BBC, discussions between the CCGs and the consortium are expected to take place over the next few weeks, before a formal proposal is submitted.
The group includes University Hospitals North Midlands, the Royal Wolverhampton Hospitals Trust and private firm Interserve.
The CCGs said they brought together a wide range of expertise.
A smart motorway scheme is to be built on the M23 in Surrey and West Sussex at a cost of up to £211m.
[NEXT_CONCEPT]
A sequel to HG Wells's The War of the Worlds is to be published in 2017 when the copyright on the original expires.
[NEXT_CONCEPT]
More than 63,000 people have signed a petition against what they say is the privatisation of cancer care in Staffordshire.