The Upper Clutha Tracks Trust (UCTT) and the Department of Conservation have awarded a contract, and construction is now under way on a section of track which joins Albert Town and Luggate.
Wanaka Doc area manager Paul Hellebrekers said the 2.5km long track above the true right bank of the Clutha River would probably be finished by February.
The "challenging" section of track involves a 500m climb over the Halliday Bluffs, from the confluence of the Clutha and Cardrona Rivers.
The track would rise to the natural terraces above the Clutha River and wind its way down towards Stevenson Rd, near the Wanaka airport, he said.
The joint walking and mountain-biking trail project demonstrated how successful initiatives could be when different groups worked together with the same objective in mind, Mr Hellebrekers said.
The new track is the most recent addition to a network of trails linking townships across the Upper Clutha district, an initiative first pushed for by the founding members of the UCTT.
The trail also heralds a further step towards the establishment of the Clutha Mata-Au River Parkway project, which seeks to provide a public corridor from Lake Wanaka to Balclutha.
Public access to the new trail was provided for by landowners Meg Taylor and Lloyd Ferguson.
