The money will promote cycling and walking across the country and further increase the construction of bike lanes.
The government said: “This funding will help see the construction of hundreds of miles of new high-quality cycle lanes.”
A new version of the Highway Code is also being published which “ensures road users who can do the greatest harm have the greatest responsibility to reduce the danger they may pose to others.”
The new code will also give “guidance on safe passing distances and speeds and ensuring that cyclists have priority at junctions when travelling straight ahead.”
Transport Secretary Grant Shapps said: “Millions of us have found over the past year how cycling and walking are great ways to stay fit, ease congestion on the roads and do your bit for the environment.
“As we build back greener from the pandemic, we’re determined to keep that trend going by making active travel easier and safer for everyone.
“This £338 million package marks the start of what promises to be a great summer of cycling and walking, enabling more people to make those sustainable travel choices that make our air cleaner and cities greener.”