Prime Minister Edouard Philippe said France was known globally for the Tour de France but trailed northern European neighbours as cycling had just a 3% share of public transport, less than half the European average.
Mr Philippe said cycling was seen as a sport and not a means of transport for shopping or work – and that had to change.
He wants to “triple the share of cycling to 9% by 2024, when we host the Olympics”.
This would boost air quality and cut pollution in built-up areas, improving health and boosting towns’ attractiveness with improved quality of life.
As part of the Plan Vélo, local authorities are asked to propose projects by December with the €350million to be spent over seven years on infrastructure.
This would create bike lanes on major roads – including separate lanes on those with a speed limit up to 50kph – plus better road markings and a special bike zone at traffic lights.
The Code de la Route will be updated to better recognise cycling after a bike users’ survey showed 90% of cyclists felt roads were unsafe for children and older people.
School bike lessons will be brought in by 2022 so all children can ride by the age of 12.
The plan also wants better bike security with more secure bike parks to stop the 300,000 thefts a year. New bikes must have an immatriculation number on the frame and this will be extended later to old bikes.
Moves to encourage cycling include a tax-free €200 instead of kilometrage allowance for nearly all public workers by 2020 while firms can pay up to €400.
As car use costs about 40centimes/km with public transport 45centimes/km, cheaper innovations such as electric bikes could open up commutes from outside the optimum 5km distance and ease exertion on hills.
Meanwhile, Paris mayor Anne Hidalgo and her Brussels counterpart have called for an annual European Day Without Cars to cut inner-city pollution.