The city has to promote sustainable transport such as cycling
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Peterborough is one of seven cities and towns in the running for a share of £7.5m in government funds to help develop a new sustainable transport scheme.
The city is competing against Halifax, Darlington, Worcester, Hereford, Wolverhampton and Weston-super-Mare.
Each place has to submit plans for schemes to promote sustainable transport, such as walking and cycling.
The idea is to reduce car dependency and tackle traffic congestion.
Two of the locations on the shortlist will be selected to share the funding and will have to act as showcases for other cities and towns wanting to promote greater travel choice.
The money on offer comes from the Department of Transport's multi-million pound Sustainable Transport initiative.
The two winning places will be announced next year.