The Government is muscling in on Green Party turf by promising an extra $100 million over four years for urban cycleways.

Its initiative has been announced from the top today by Prime Minister John Key, who early in 2009 allocated $50 million - since topped up by a further $8m - towards a national cycleway being built in regional sections, to create jobs and assist economic development.

The new money for urban bikeways - to be drawn from the Government's consolidated fund - will be in addition to between $45 million and $103m already announced for the next three years for walking and cycling from road fuel taxes.

Transport Minister Gerry Brownlee said the extra funding followed recognition by National that cycleways in New Zealand's largest cities were fragmented and offered varied levels of service.

He said that was despite the health benefits offered from commuting by bike, and the pressure it took off other transport networks.

"Many people cite safety concerns and a lack of infrastructure as reasons for not cycling so we're going to begin building cycleways to a standard that delivers real incentives for commuters to make a change," Mr Brownlee said.

"Building more comprehensive cycling networks will require new infrastructure to connect existing routes and expand the network into wider urban areas.

"This funding package also strongly complements other aspects of the Government's ambitious transport infrastructure programme, which is designed to ensure people and freight can reach their destinations quickly and safely."

The minister said an urban cycleway investment panel would include government and local body officials sitting with representatives of organisations yet to be nominated, in time for draft terms of reference to be presented to the Cabinet by October 31.

His officials estimate that $10 million will be allocated for this financial year, to be followed by respective annual instalments of $35m, $30m and $25m.

The announcement follows a Green Party proposal for $100m to be spend on walking and cycling improvements for each of the next three years, before ramping up to $130m by 2024-25.

The Automobile Association predicts more money for bikeways will offer benefits for all road users, saying existing facilities are not well connected, resulting in "dangerous pinch points when traffic converges."

Spokesman Mike Noon said safe cycling infrastructure encouraging more people into the saddle would ease congestion as well as "most importantly reducing the risk of cycling crashes and injuries."