The funding, provided through a national cycle trail maintenance fund, was announced yesterday, to the delight of those pushing for a safe way to get across State Highway 8 at the bottom of the Clyde hill.
It is the latest development in what has been, so far, about an eight-year campaign by interested groups including Clyde residents, Clyde Primary School and the Otago Central Rail Trail Trust to have an underpass constructed.
Central Otago Mayor Tony Lepper said the funding guaranteed Clyde would soon get an underpass.
Three options had been put forward for the facility.
Mr Lepper said the preferred option, which would go under SH8 from the Albert Dr laneway, was now feasible from a funding perspective.
Last month, CODC infrastructure services manager Jon Kingsford said the council would consult affected landowners before announcing where the underpass would go.
Cr Clair Higginson said the council and the New Zealand Transport Agency would pick up the tab if the bill was more than $177,500.
Rail Trail Trust facilitator Clare Toia-Bailey said the group was excited to get the money, describing it as ''a real collaborative effort between a number of groups''.
The underpass would provide a safe option for crossing SH8, and connect the rail trail head with the Clyde Railway Station.
Clyde business community representative David Ritchie said it was tremendous news for the community.
Another $12,500 of Government money will pay for changes to State Highway 87 at Daisybank, where the rail trail meets the highway.
A dangerous corner will be altered to improve safety.
The Queenstown Trails Trust also won a sizeable contribution.
The trust received grants for two projects on the Queenstown Trail totalling $213,600.
A total of 13 projects would get nearly $1 million in funding, Prime Minister and Minister of Tourism John Key announced yesterday.
Queenstown Trails Trust chief executive Mandy Kennedy said she was ''delighted'' at the announcement.
The group would spend $175,200 repairing the Twin Rivers Trail, which has been partly closed since August, after it was damaged.
The remaining $38,400 would be spent upgrading the Kelvin Peninsula Loop section of the trail around Queenstown Golf Club.
