The investment is being carried out at Lochore Meadows Country Park and is set to be completed by the end of March 2017.
Other features include a new visitor centre, golf club house and pavilion being built.
The bike trails project will also benefit from £69,000 of funding from sportscotland Legacy Active Places, while a further £83,000 is being allocated to the golf club house scheme.
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Cllr Mark Hood said: "The bike trails should be completed and ready for people to enjoy by the end of March. The current trails are only accessible by experienced mountain bikers but this improvement means that the Council's Outdoor Education Team will be able to attract more specialist groups, such as vulnerable groups from schools, community learning programmes and the local community.
"We're set to have a fantastic network of trails that will be a real asset to Lochore Meadows. This work builds on the success of one of Scotland's biggest bike clubs, the Meedies Bike Club, and is testament to the strong partnership working they have with the Outdoor Education Centre in the Park."
(LM/CD)
