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The Queenstown Trail is one of 18 projects across the country which benefited from a $50 million Government start-up grant.
The trail will include seven bridges and two underpasses and will cross two rivers and pass three lakes.
Queenstown received $1.8 million to help with its 90km trail network, which will link Queenstown, Kelvin Heights, Lake Hayes Estate, Arrowtown and the Gibbston valley.