The project was first discussed in 2002 and could finally be underway after a meeting with Phillip Street residents, councillors and council staff earlier this week.

Phillip Street resident Frank Bassi said this was a "good" outcome, but residents were still "sceptical".

In 2004 the council wrote to nearby residents and informed them a cycleway link would be built in three years time. The reason the project was expected to start in 2007 was because it was unfunded. However, since then the council has received $105,000 in funding for the project, including $20,000 from the state government.

Construction for the project was set to start in the first week of June this year, but was delayed after new information in relation to flood impacts on the site were revealed.

Mr Bassi said this was just another "excuse" for the project, which residents had been waiting to start for many years.

"It's just empty words and broken promises from council," Mr Bassi said. "The money is there to do the job. We just want the project to start."

However, the council's deputy general manager operations, finance and risk, Barry Paull, said the project would continue, but the council had to look at different options to make it viable as a result of drainage issues found on site. To fix the flood and drainage issues, Mr Paull said it would require "significantly" more money.

The original option for the pathway was to install a gravel pathway, but council engineers discovered the pathway would wash away in the rain.

The council's group manager infrastructure services Dominic Lucas said this option would cause long-term maintenance issues and make the path "unsuitable" in the future.

The second option, which the council's staff recommend, is to build additional water pipes underneath the path and construct a concrete path on top. Mr Lucas said this was a "slow and expensive" process and would cost about $200,000.

The third option would be to build a timber boardwalk above the flood-prone ground at a cost of about $240,000.

"No matter what option we choose, it will be a difficult job," Mr Lucas said.

Bowral resident Gerry Kroon, whose family lives on Phillip Street, questioned why the issues weren't addressed in the council's 2002 technical report .

"They obviously never did the proper engineer work," Mr Kroon said.

A report with the three options will be prepared for councillors on July 22 and if an option is approved, works are scheduled to start in early September or October.