The project was aimed at making walking through the north end of Oamaru safer by introducing traffic lights at intersections on State Highway 1, refuge crossings and adjusting entrances to 13 side roads.
It was to be fully funded by Waka Kotahi NZ Transport Agency through its transport choices programme, but the agency is waiting to see what the new government wants before confirming such funding.
The Waitaki District Council said it was advised of the funding pause late last month and this had followed indicative advice from the agency regarding the potential change of government.
The council had anticipated this potential issue in its project plans and timing, a spokesman said.
In September, the council had celebrated getting the "green light" for Oamaru upgrades and it had been hoped the project might be finished by the end of March.
The transport agency confirmed this month it had "paused" making any further funding commitments to a climate emergency response fund, which included the transport choices programme and one aimed at reducing vehicle kilometres travelled.
The Invercargill City Council and Southland District Council have been working together on a project to improve cycling facilities.
Construction or implementation of transport choices work would be put on hold until there was clarity about funding, Invercargill City Council chief engineer Russell Pearson said.
A permanent pump track was planned at Aurora College, as well as mobile pump track facilities, and bike and scooter stands at various locations.
Other projects in the South affected by the funding pause include planned roading changes around South Dunedin schools and proposed adjustments at the northern end of George St in Dunedin.
A tender process opened for the South Dunedin work in September and closed on October 25.
A Dunedin City Council spokesman confirmed no further work had been done for that project since tenders closed.
Possibilities for the northern end of George St include marked cycle lanes, adjustments to intersections and provision of "in-lane" bus stops.
In-lane bus stops allow buses to stop without having to then merge with traffic to continue their journey.
