The construction contract has been awarded to Dunedin-based company Delta Utility Services, New Zealand Transport Agency (NZTA) southern regional director Jim Harland said in a statement this week.
The work, which would start on Monday, involved extending the existing shared path 2km from Maia to the St Leonards Boat Club.
It will run along two sections of the Otago Harbour causeway which carries the main trunk railway line.
When completed in June, there would be a continuous 4.5km path for walking and cycling commuters between Dunedin and St Leonards, he said.
The present path from Dunedin to Maia was 2.5km.
The extension represented an investment of more than $1 million by the agency in safer walking and cycling alongside SH88, Mr Harland said.
"The shared path offers considerable safety benefits, [including] giving walkers and cyclists an alternative to using SH88, the main route to the Port Chalmers container port.
"The path will connect with Dunedin via the cycleway around the Forsyth Barr Stadium and then on to other cycle lanes around the city."
Eventually it was hoped the path would run from Dunedin to Port Chalmers.
Investigation work on the St Leonards to Port Chalmers leg should be completed in the next few months, Mr Harland said.
