The original proposal was going to cost $11m and the Government was looking at projects worth up to $3m or $4m, he said.
A new cycle trail would boost tourism. Tauranga Road Cycling Club race co-ordinator Heath Lett said there was already a big need for the trail.
"There is nothing here and everybody is supposed to do 30 minutes a day exercise and they are not doing it, if there was somewhere safe to ride a push bike, people would take their kids along."
National MP for Tauranga Simon Bridges said he was committed to ensuring Tauranga got a cycleway.
The project would cost between $4m and $5m to complete if the bidding was successful, Mr Bridges said.
What is the urban cycleways announcement?
1. An extra investment of $100 million over the next four years.
2. An Urban Cycling Investment Panel, will investigate opportunities to invest in urban cycleways.