The government has committed $13.2 million to extend the Central Otago Queenstown Trail Network today.
Tourism Minister Kelvin Davis announced the funding today, which will connect four existing Great Rides, linking 30 communities over 530km.
Otago cycle trail visitors numbers are expected to double by 2032 to more than 170,000 a year.
The project is expected to create 329 full-time jobs across the region.
The Otago Community Trust, which is a major local funder of the project, said the trail network would prove a boon for communities away from major tourist hotspots.
Its chief executive, Barbara Bridger, said momentum would have been lost without the government's support.
"We think it's great that the government has made this funding injection into the region," Ms Bridger said.
The cycle ways passed through small towns and communities and helped "invigorate" those communities.
Preparation has started so the project could get under way in the near future, she said.