The decision removes one of the main incongruities associated with the freeway, which had many locals scratching their heads and comes after lobbying by Frankston MP Alistair Harkness and Bicycle Victoria.

Roads Minister Tim Pallas said the $3.6million path would fill in "a piece of the puzzle by building a tricky section and providing a crossing at Moorooduc Highway".

Peninsula Link Trail would now be 25kilometres long beside some of the 27-kilometre, $760million freeway between Carrum Downs and Mt Martha. It will start near the end of the existing gravel EastLink Trail at Patterson River and end at Moorooduc.

"Previously, plans for the path ended just south of Baxter and we are extending it so people can travel along the disused Mornington Tourist Rail and across Moorooduc Highway into Mt Eliza Regional Park and [Moorooduc] tourist railway station," Mr Pallas said."

A significant amount of planning had gone into the path given the area was low lying and sometimes subject to flooding. "The path will be accessible all year round [with] elevated sections and traffic signals will be installed at Moorooduc Highway."

Peter Baulch of the Baxter residents' lobby group welcomed the extension.

"As originally planned, the path would have finished in the middle of a cow paddock, with no appropriate facilities.

"Baxter residents have also been campaigning for construction of the 'missing link' between Baxter and Somerville of the existing pathway from Frankston to Hastings, and welcome the recent advice from Mornington Peninsula Shire that it is now a priority and will be constructed in 2011-12."