The £1.3m scheme being delivered by Staffordshire County Council will see major cycling improvements to the A5190 Lichfield Road and A4601 Hednesford Road.
The new cycleway will run two-way from the Old Hednesford Road junction, along Hednesford Road and onto Lichfield Road to the McArthur Glen Designer Outlet.
Work will see better quality footways and safer conditions for pedestrians and cyclists along with better cycle parking in town.
Once complete, people will have access to a cycle network that is easy to navigate, has separation for pedestrians, cyclists and traffic and slower traffic speeds.
Work started on Monday and is expected to take around 31 weeks to complete.
Some sections of the route will be temporarily closed during the scheme to ensure that the work can be carried out safely.
David Williams, cabinet member for highways and transport at Staffordshire County Council, said: “These improvements are all part of our plans to make it easier and safer for people walking and cycling in and around Cannock.
“The project will provide a vital missing link towards the town centre and Cannock train station as well as connecting with the designer outlet and Hednesford Road.
"It will give people a more direct and safer route to walk and cycle which we hope will encourage more people to choose more active and greener modes of travel.
“The scheme is part of the county council’s local cycling and walking infrastructure plan for the town and follows public consultation earlier in the year.”
The project is being funded by the Department for Transport’s active travel fund grant.
People can keep up to date with the project at staffordshire.gov.uk/Transport/transportplanning/Active-travel-construction/Active-travel-construction.aspx