Deforming or cutting hole in mesh

I created the terrain and pavement in Blender and I'm trying to arrange them in Unity. I'd like to put pavement onto the terain in such a way that it does not show terrain above pavement. I want to prevent t$$anonymous$$s effect:

The solutions that I came up with are:

1. Cutting hole in terrain in realtime in Unity

2. Deforming terrain by pavement

3. Not rendering the part of terrain above pavement

I'm asking if at least one of these solutions is possible to be implemented in Unity? Any other solutions are really welcome. Eventually I can use blender to create desired result, isn't it a better idea for world creation?