"The Baird government is investing $1.5 million to build a new walking and cycling connection over Windang Bridge," Transport Minister Gladys Berejiklian said.

"The community has been calling for this missing link and I am pleased we are delivering."

The bridge marks the border of Wollongong and Shellharbour council areas and work is due to start next financial year.

"The government will work with both councils but has provided 100 per cent of the funding for this vital infrastructure," Ms Berejiklian said.

"Cyclists and pedestrians will be able to safely travel on both sides of the bridge - a big win for the local community, businesses and tourists."

The minister said work would take place on the existing footpaths and the bridge would not need widening.

Wollongong Lord Mayor Gordon Bradbery welcomed the funding.

"Council is currently embarking on an ambitious program of renewing and building shared pathways and cycleways in the city," Cr Bradbery said.

"Council has been working closely with Roads and Maritime Services on this project. The roadway is managed by RMS and this would be a project under their authority.

"A shared pathway over the bridge is part of council's bike plan for the city and would link our extensive cycleways and footpaths to those of Shellharbour City."

The work on Windang Bridge is part of $40 million in funding for new cycling and walking paths across NSW.

Among the 380 projects is one at Milton, on the South Coast.

The town will get funding to build an off-road cycleway beside Matron Porter Drive between Garrads Lane and Sunnygrove Lane.