Mr O'Brien said safety and connectivity are priorities for Melbourne's most popular activities areas.

"These bike lane upgrades are essential to help improve cyclist safety and will improve connections between the Chapel Street Precinct and the wider bike network along the Yarra River.

This funding will provide both cyclists and motorists with a safer road in this popular destination.

"The upgrades will also assist with traffic flow during peak times and will ensure a better ride for cyclists travelling to and from work, school and for recreational purposes," Mr O'Brien said.