Darlington is to receive a £1.5m grant to encourage local residents to get on their bikes.
Government cash is being used to promote pedal power
The town has been named as one of six "cycling demonstration towns" promoting cycling as a safe, popular and healthy way to get around.
The Department for Transport funding, to be spent over the next three years, will be matched by cash from Darlington Borough Council.
It is part of a £17m national plan to confront transport and health issues.
The project will focus on working with schools, hospitals, employers and others to help reduce congestion and increase levels of physical activity.
Transport Minister Derek Twigg said: "I am delighted to announce this new funding for Darlington, which will now be a forerunner in encouraging local people to take up cycling.
"Research has shown cycling can improve fitness and reduce obesity, which can cause serious health problems.
"This investment shows government is committed to encouraging more people to use pedal power and cycle all or part of their journeys."
Philip Darnton, chairman of the Cycling England organisation which recommended the six towns, said: "People want to cycle and we must work together to help them do so more safely and more often."
The other cities to benefit are Brighton and Hove, Derby, Exeter, Lancaster and Aylesbury.