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Route 516 begins at an intersection with Trans-Labrador Highway (Route 510) at Cartwright Junction and heads northward through remote, hilly, and wooded terrain for the next several kilometres. It crosses the Paradise River before meeting a local road leading to the community of the same name. This aforementioned intersection is located at the site of the former Paradise River Airport. The highway then parallels the eastern shore of Sandwich Bay for several kilometres, where it passes by Cartwright Airport, before entering the Cartwright town limits. Route 516 comes to an end at an intersection between Point Road and Main Road in downtown Cartwright near the harbour.
Phase II of the Trans-Labrador Highway involved completion of highway north to Cartwright from Red Bay, and was opened in 2002. Although the entire route was initially designated as Route 510, upon completion of Phase III, the northern 94 km (58 mi) from Cartwright Junction was designated as Route 516.