The Terezijana road was eventually replaced by the Karlobag Road, completed in 1851 and designed by Josip Kajetan Knežić. By that time, Knežić had already distinguished himself as the builder of the Velebit mountain roads Sv. Rok–Mali Alan–Obrovac and Karlovac–Senj. In constructing this road, he opted for uniform and gentle gradients that do not exceed a maximum of 5%, in line with contemporary road construction standards.
Unfortunately, Knežić passed away before witnessing the completion of his third trans-Velebit road, and the project was therefore finalized by his chief associate and Military Frontier officer, Simeon Kekić.
The reconstruction and asphalting of the Karlobag Road were carried out in the 1960s; today, this is the Gospić–Karlobag road.
To commemorate the construction of the road, Knežić commissioned a fountain made of cut stone in the shape of an obelisk near the Ljubica spring in 1845. For the same reason, a year later he had a stone cube, known as the “Kubus,” erected at the Stara Vrata pass.