Federal Transport Minister Catherine King announced the investment on Tuesday, with the government to create an Active Transport Fund for infrastructure in urban and regional areas.
The investment, which is expected to be available from July 2025, comes 15 years after a $40 million package for bikeways was introduced in the wake of the global financial crisis.
It also comes weeks after the Labor government revealed plans to introduce car emission limits to encourage more manufacturers to import low-emission vehicles and cut transport pollution.
Ms King said the $100 million investment would fund bicycle and walking paths around Australia, and would also pay for upgrades to existing infrastructure.
"We want communities to thrive, whether they be in cities or in the regions," she said.
"We are investing to build economic opportunity and also the opportunity for people to enjoy the spaces and places they live in, building connection and improving safety."
Guidelines for the fund will be created after talks with state and territory governments.
Institute for Sensible Transport senior analyst Liam Davies said the initiative could provide health benefits as well as cutting transport pollution.
"This is recognition that we need to decarbonise our transport system and to do that we need a multitude of different policies and converting short trips from cars to walking and cycling is low-hanging fruit," he said.
"If we want to tackle climate change as well as improve livability, we need to be building our cities in ways that encourage walking because we know there are co-benefits that come with (that)."
Mr Davies said while the new fund would make a difference, the federal government should consider providing certainty for active infrastructure projects further down the track.
"This is a great start but we would encourage the government to make this an ongoing program so councils and states can reliably tap into a funding mechanism to develop active transport," he said.
A recent study by the Climate Council, called Seize the Decade, also identified active transport as a way to cut transport emissions.
It found fewer than four per cent of trips are taken on foot or on bicycles in Australia, and recommended governments aim to shift trips to walking and cycling at a rate of five per cent each year.
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