Victoria council has voted 8-to-1 in favour of looking into a two-way, separated bike lane on Wharf Street rather than Government Street.
City staff have now been instructed to look at Wharf as the preferred option.
Councillor Chris Coleman says the decision could lead to a loss of up to thirty parking spots on Wharf, but a similar number of spaces would be lost if council chose to pursue a separated bike lane on Government Street.
"One of the advantages to Wharf Street is there's a whole bunch of surface parking on the lower deck on the waterfront side that isn't fully subscribed. One of the problems with that parking is it's not particularly useful for people with accessibility issues."
Staff also found the current hourly cycling volume on Wharf Street is nearly four times greater than on Government Street.
Biketoria is being rolled out in four phases, with the first phase still underway. Work on the initial separated, two-way bike lane is underway on Pandora Avenue; constuction on the second lane is expected begin next year on Fort Street.