The new section of path will pass behind the sheds located at the south-western corner of the lake.
The works will be completed in two stages, with the asphalt path to be constructed in May and lighting to follow later in June.
Pedestrian access in front of the sheds will be retained until the lighting is operational on the new path.
Landscaping improvements in the vicinity of the old path alignment will also be undertaken once the construction works are completed.
Council’s Director Infrastructure Phil Hoare said it is hoped the new path will improve accessibility and safety for users of the path and boat ramp.
“We are continuing to improve safety and accessibility across Greater Shepparton and this is another step in the right direction,” Mr Hoare said.
“It’s great to see so many people using the path around the lake, and this work will complete the path loop and help people avoid walking through the parking area.
“By the end of June the lighting will be in place and that will see the finish of the shared path.”