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Yesterday Mrs Cardno and New Zealand cycle trail programme manager John Dunn signed an agreement the Government would allocate $4 million to start and complete the first stage of the trail, from Walter Peak to Mossburn.
Mrs Cardno told the Otago Daily Times "cycling is the new golf for the babyboomer age-group".
Droves of tourists attracted to the trail network would boost economies in small communities and create jobs, specifically for young residents.
"I'm absolutely delighted," Mrs Cardno said after signing the agreement.
"It's taken an awful lot of hard work and patience to get to this stage.
"I guess I'm a little disappointed we didn't get the full funding [of $9 million to $11 million for both stages], but we've got enough to make an excellent start, and we will continue to raise funds to complete the circle."
About 25 representatives of the council, ministry and media and supporters attended the signing in the Southland District Council chambers, in Invercargill. yesterday.
The $4 million will pay for the first stage of Around the Mountains.
The second stage would continue the trail to Lumsden and then Kingston.
Venture Southland community development and events group manager Rex Capil said the next month would involve confirming and defining the actual route, followed by organising legal easements and surveying.
The consents process could take three months, with another month expected for contract tendering.
Construction was likely to begin in October, coinciding with spring weather, and would take about a year.