Bristol is to be the country's first Cycle City after winning £11.4 million of government funding to improve facilities for cyclists.

The money will rise to £23 million over three years with matching funds from the local area.

The city won the cash after promising to encourage 2.5 million more people to take up cycling with a range of bicycle-friendly schemes, including a Paris-style on-street bike rental network, a central bike lock-up facility for commuters, including showers and lockers and dedicated cycleways from the city's suburbs into the centre.

The government is investing in cycling as part of plans to improve the nation's fitness in the run-up to the London Olympics in 2012.

The award was welcomed by cycle charity Sustrans, based in Bristol and which coordinates Britain's National Cycling Network.

"This is a great opportunity for the city to improve and develop the cycling and walking routes," said Sustrans chief executive officer Malcolm Shepherd.

The Department for Transport also announced funding for 11 Cycling Demonstration Towns, including Blackpool, Cambridge and York, to add to the existing six appointed in 2005.

Together with Bristol they will share £47 million of government funding - doubling to £100 million with local matching funds - to promote cycling.