Orange City Council said the work would likely start next year after state government funding was announced on Wednesday.

The project will also feature a new 2.5 kilometre (1.2 metre wide) footpath along Molong Road from the intersection with Burrendong Way to the Northern Distributor Road.

An on-road crossing will be built across the Northern Distributor.

The route will continue as a shared cycle path on the western side of Molong Road to Murphys Lane ending at the Orange Anglican Grammar School.

Funding has also been provided for a separate project providing a 1.1 kilometre footpath on the eastern side of Hill Street from Margaret Street to Roselawn Drive.

An Orange City Council spokesman said the grant would effectively double Orange City Council's spending on footpaths this financial year.

"Both projects will include a footbridge over local creeks," he said.

"Council staff are still assessing details of the grant funding, but it's expected the projects will begin next year."

Meanwhile Cabonne Council has received more than $126,000 to build 700 metres of shared path in Eugowra to connect residential areas with a school and the CBD.

NSW MLC Sam Farraway said the works would make it easier for the community to get around their local area.

"This new infrastructure will help to provide safe access for pedestrians and cyclists to schools and other facilities," he said. Mr Farraway said it was part of a $710 million statewide investment over four years.