Prime Minister John Key today announced the Government has set aside $2 million to extend the Mountains to Sea Cycle Trail from Turoa to Ohakune.

The proposed new trail will be partially funded through the National Cycleway Fund and is part of the Manawatu-Whanganui Economic Action Plan which aims to boost the region's economy, increasing jobs, income and investment.

"The proposed new trail will be up to 20km long and link with the existing Mountains to Sea Cycle Trail - one of New Zealand's Great Rides," said Mr Key.

"The alpine setting will make it a truly unique mountain biking experience and an exciting drawcard for tourists. Research shows it could boost the local economy by as much as $5.8 million in five years."

Mr Key said the total cost of the extension is likely to be between $4-5 million therefore the local community will also need to contribute to the cost.

"Given the extension will occur in a National Park a National Park Management Plan Change is needed. This will require public consultation and community support. DoC will lead that process on behalf of the New Zealand Conservation Authority," he said.

The Government's $2 million investment is also subject to National Cycleway Fund application requirements being met.

"The New Zealand Cycle Trail has already been extremely successful in attracting high-value visitors to the regions and getting them to stay longer, with regional economies experiencing positive spinoffs such as a growth in jobs," said Mr Key.

"We are confident the extension of the Ruapehu Cycle trail will have similar benefits for the Manawatu-Whanganui region."

The Government is investing $75 million in the New Zealand Cycle Trail.