Hereford City Council has pledged £50,000 towards proposals for a cycle track around the racecourse.
Councillors agreed the funding subject to the team behind the scheme securing enough investment for the plans.
The proposals for the 1.5km circuit have the backing of Herefordshire Council and Hereford City Council and was granted planning permission in May 2016.
Consultant Owen Davies said : “Ten years ago British Cycling and Sports England began investing quite heavily in closed road racing cycling circuits in the UK as a way of increasing participation in sport.
“There has been a ground swell of support for development of a track in Hereford.
“We’ve developed a business case for the investment in the city and looked at the needs and demands that exist in terms of the cycling clubs in the community.”
He said British Cycling had acknowledge that there was a strong need for investment in the city to serve the county and wider region.
“We have been able to prepare ourselves for that. We have planning permission and the business case in place.”
A new funding pot of £15m was announced last November by British Cycling and Sport England to invest in new cycling facilities across the country.
Those behind the Hereford scheme have applied for just under £500,000.
Alex Haines, Halo Leisure general manager, said: “The application was submitted at the beginning of February.”
He said the funding would cover half of the project cost.
“The process will take some time. We assume that once we get to the second stage, we will look at the finer detail.
“Halo has been successful with the last four Sport England applications totaling around £1,3m over the last four years so we have a good track record.”
He said the biggest hurdle was getting the capital funding to get the project off the ground.
“The track is a tarmacked road surface which has got street lighting around it.
“It is effectively low maintenance and has very low running costs if we build it to the right standard.”
Councillor Jim Kenyon said businesses believe in the project and pledged at least £40,000 towards it.
“The message that goes out to British Cycling if we invest this money is that the county and city councils along with businesses support it,” he said.
He also said local MP Jesse Norman supported the project and has made a personal pledge because he believes in the project.