An extension of the Tukituki Trail in Central Hawke's Bay will almost double the length of the area's popular walking and cycleways.
It will create another 12km of paths on the other side of the river, including the completion of the western Pukeora loop.
There will also be 10km of mountain bike trails added in the Gum Tree mountain biking reserve.
Economic and Regional Development Minister Stuart Nash said the extended trail will boost local business - highlighting the importance of regional jobs to help accelerate the economic recovery.
"Research shows more domestic visitors to Hawke's Bay use the region's cycle trails than international tourists, contributing more than $10 million to the local economy," he said.
"That's an important advantage for Hawke's Bay when international visitor numbers are severely restricted by the Covid-19 crisis."
A blessing was held on Thursday morning by local kaumatua Ngavii Pekepo to mark the start of the extension in Waipukurau.
The Provincial Development Unit is funding the project to the tune of $750,000, as part of the $100m Worker Redeployment Package announced in response to the Covid-19 epidemic.
Nash said the trails will make CHB an even more appealing place.
"Extending the Tukituki Trail and bridging the river will make an already attractive route even better, providing recreation opportunities for locals, families and visitors."
He said this will eventually form an important part of the Route 52 Heartland ride, linking Hawke's Bay with Wairarapa.
Nash added that not only tourism and construction will benefit from lengthening the trail but local workers and families will too.
"Over the next six months, the project will provide 12 jobs for redeployed workers," he said.
"As a minimum, they will all be paid the living wage, as well as having individualised pastoral care to help them achieve sustainable employment."
Central Hawke's Bay Mayor Alex Walker said there are many positives to come out of extending the Tukituki Trail for CHB specifically.
"Not only are we now creating jobs for local people to deliver this amazing work, but the end result is going to see everyone having better and more enjoyable access to our great outdoors."