The Minister unveiled the proposals at the Cycling Scotland conference in Edinburgh on 12 November.
The new 'Community Links Plus' competition will see funding made available to councils to enable them to prepare proposals for exemplar, on-road, segregated cycle lanes.
The successful schemes and associated behaviour change initiatives will be delivered between 2016-2019.
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The competition will be managed by Sustrans Scotland and Transport Scotland, with the first stage of the process involving local authorities submitting an expression of interest.
Authorities will then receive funding to help design their proposals.
Mr Mackay said: "The nation's cycling infrastructure is in line for a real boost with a new Scottish Government competition designed to encourage more people to cycle for short journeys.
"This competition aims to deliver high profile, continental style infrastructure which will improve safety while also encouraging less confident cyclists to make day-to-day journeys by bike."
Keith Irving, Cycling Scotland chief executive, added: "Further investment in quality cycling infrastructure and promotion is essential for encouraging anyone, anywhere to cycle."
The shortlisted projects are expected to submit detailed proposals by end of June 2016 with an announcement of the winner(s) in the Autumn.
(LM)
