An elevated cycling freeway will be built above Footscray Road, transporting cyclists faster into Melbourne's CBD.
The 2.5-kilometre "veloway" will sit underneath a future road flyover over Footscray Road and is designed for serious commuters, bypassing a number of traffic lights.
It will have escape hatches and stairs, so that people can exit it if they get into an accident or have a puncture.
"[It's very much] a freeway for people riding their bikes each day in and out of the city," Roads Minister Luke Donnellan said.
Those seeking a more relaxed journey can still take the existing bike path along Footscray Road, which will be widened and upgraded.
The veloway will begin around Shepherd Bridge in Footscray.
Details of the bicycle freeway were announced on Sunday as the Andrews government confirmed it had chosen a consortium led by John Holland and CPB Contractors to build the Western Distributor project.
As part of that $5.5 billion in road spending, the government has pledged to build almost 14 kilometres of upgraded cycling routes and footpath, completing missing links in the Federation Trail and the Kororoit Creek Trail.
The work will mean that people will be able to cycle into the CBD from Werribee without having to intermingle with cars or trucks, the government said.
A new bridge over Whitehall Street next to Yarraville Gardens will allow cyclists and pedestrians to avoid the dangerous intersection of Somerville Road and Whitehall Street.
Last month Moonee Ponds mother-of-two Arzu Baglar, 36, was struck and killed by a truck while cycling through the junction.
A bicycle bridge will also be built over Footscray Road near Costco in Docklands.
The cycle upgrades and veloway were welcomed by Bicycle Network spokesman Garry Brennan.
"It will be quick, direct and safe and will greatly improve the bike commuting experience for people in the western suburbs," he said.
"The project adds bike lanes from Dynon Road into the west end of the city and it does away with the nasty crossing of the Moonee Ponds Creek at Footscray Road.
"The Western Distributor will also build the final section of the Federation Trail, as well as improving the route from Yarraville into Footscray, getting rid of dangerous intersections where bikes come into conflict with trucks."
The population of Melbourne's western suburbs is predicted to continue expanding rapidly in the coming decades.
It is expected another 1 million people will flood into areas such as Footscray, Altona, Werribee and Caroline Springs by 2051.