"When it is finished next year the entire 23.7km of Rotorua's $5.52 million CyWay will make cycling an even more attractive option for transport in the city.
"It will also have benefits for tourism and economic development by furthering Rotorua's reputation as a cycling destination and recreation-friendly city."
The CyWay is jointly funded by the Government's Urban Cycleways Fund, the National Land Transport Fund, and Rotorua Lakes Council.
Mrs Chadwick said it would make cycling safer for children on their way to and from school as well as providing commuting options for cyclists.
"This will complete our inner city cycle loop from Ngongotaha into town," she said commenting on the new project.
It also meant 14,000 schoolchildren in Rotorua would be within 500m of a cycle way in the city, she said.
Owhata Primary School principal Bob Stiles said having facilities that connected the neighbourhood to the school was a great step to seeing more children and their whanau on bikes.
"Having more students bike to school is not only great for their health and self-confidence, it also makes the school entrance a lot less busy during pick-up and drop-off times," he said.
To encourage more students to giving bike riding a go, both Owhata and Mokoia are now part of the Bikes in Schools programme.
The CyWay programme has grown from 10 projects to 11 with council staff investigating options for a Western Heights link to connect the residential areas there to the three main schools in the area.
