The Kildonan Settlers Bridge is part of the original, 1.5-kilometre stretch of the Chief Peguis Trail. (CBC)

The oft-delayed extension of Winnipeg's Chief Peguis Trail is back on after the three levels of government agreed on how to fund the project — which has ballooned to $110 million.

The new four-kilometre stretch will run from Henderson Highway to Lagimodiere Boulevard with an underpass at Rothesay Street to avoid congestion at a traffic light-controlled intersection.

Ron Lemieux, Manitoba's minister of local government, said the route will provide motorists with an easier time traveling from Main Street to the city's northeast area, while North Kildonan residents will notice a dramatic reduction of vehicles on their neighbourhood streets.

The growth of northeast Winnipeg has generated the need for improved east-west traffic routes, said Coun. Jeff Browaty, who represents North Kildonan.

"Phase 2 of the Chief Peguis Trail will help remove pass-through traffic from local streets, offer recreational and active transportation trails and provide opportunities for sustainable growth," he said.

Extension planned for decades

The first phase of Chief Peguis Trail opened in October 1990. That 1.5-kilometre roadway crosses the Red River on the Kildonan Settlers Bridge, linking Main Street with Henderson Highway.

Long before that first section was built, there were plans for an eventual extension but it kept getting put on City Hall's backburner.

In the city's 2007 preliminary capital budget, a total of $34.8 million was forecast for the following three years to complete the extension. It never happened.

Then in May 2009, the city announced that construction would begin in 2010 on a $64-million extension.

However, that was slowed by funding arrangements, further public consultations and changes to the plan, such as the underpass at Rothesay Street.

On Monday, in a joint press release, the federal, provincial and municipal governments announced a partnership that will see the city contribute up $75 million and the province chip in $9 million. The rest will come from the federal government through a public-private-partnership.

No private partner has been identified yet, although a consortium known as DBF2 Ltd. is listed as the city's preferred partner.

The project will go to the city's public works committee on Tuesday. If approved, it will be forwarded to the executive policy committee on Wednesday and then city council for a final vote July 21.

If it passes without further delays, construction is slated to begin in spring 2011 with a completion date some time in the fall of 2012.

The project will include noise barriers and berms, landscaping, and pathways for walking and cycling.