About 12 new cycling ‘corridors’ will be built for commuters as well as a series of bike zones aimed at shoppers and schoolchildren with cycle priority streets and 20mph speed limits.
Transport for London will also increase cycle parking provision at Tube and railway stations.
Around 6,000 bikes will be available for hire, similar to a scheme introduced in Paris.
Bikes will be available for hire every 300m in central London and Mr Livingstone said the expansion of cycling and walking would reduce traffic congestion and help cut the capital's impact on climate change.
Mr Livingstone said: “We will spend £500 million over the next decade on cycling – the biggest investment in cycling in London's history which mean that thousands more Londoners can cycle in confidence on routes that take them quickly and safely to where they want to go.”