Funding has been approved for Rotorua's Green Corridor - a shared cycleway through the central city - and work is expected to start in March.
The New Zealand Transport Agency (NZTA) has confirmed that it will fund $227,000 of the estimated $397,000 project cost, and the Rotorua Lakes Council will stump up $170,000.
The Green Corridor will link the Government Gardens to Kuirau Park, creating a dedicated space for pedestrians and cyclists to travel through the city.
The corridor will run from the Sulphur Point cycle trail up Hinemoa St, right on to Tutanekai St, left on to Haupapa St, and into Kuirau Park.
It will be a space for pedestrians, mobility scooters, joggers, cyclists, scooter riders and skateboarders and it is envisaged it will include artwork, landscaping and carvings.
NZTA Waikato/Bay of Plenty regional director Harry Wilson said the agency was pleased to co-fund a project that would provide safe and healthy travel choices.
"The Transport Agency is focused on providing integrated transport solutions that offer safe travel options whether people choose to drive, ride a bike or walk," he said.
"Rotorua's Green Corridor will encourage more people to cycle and walk to their destinations, which will in turn help alleviate congestion on our roads, improving travel time for motorists."
Mr Wilson said the Rotorua Lakes Council presented a compelling business case and took advantage of a window of opportunity to gain funding for the project.
"We hope to contribute further to the revitalisation of Rotorua's inner city in the future, working in partnership with the council to create transport solutions that will improve linkages and make the inner city safer for people using all modes of transport."
Rotorua Lakes Council Inner City Revitalisation portfolio leader councillor Karen Hunt said confirmation of the funding was great news.
"We are providing something which will make the inner city accessible for those on wheels as well as on foot and in cars," Ms Hunt said.
"We look forward to working with the NZTA to help make it a reality and create a destination recreational feature within the inner city.
"The Green Corridor project has been part of council's planning since 2005.
"As recently as September we conducted a public survey to determine the level of support and the majority of respondents supported the concept," Ms Hunt said.
"This is a concept that has enhanced many cities around the world and I'm confident it will attract more people into our inner city."
Deputy mayor Dave Donaldson said while it was unfortunate the corridor would not be ready for Crankworx this year it meant there would be more time for detailed planning and public consultation to take place.
"The opportunity for that level of subsidy may not have been there if we didn't move quickly - it's a great windfall for Rotorua."
Work on the Green Corridor is expected to begin in March with the aim to have it ready for use by the end of June.