Limerick City, Dungarvan and Wesport are the recipients of the combined cash investment, respresenting a city, medium-sized town and a small town.
The three locations now officially become Ireland’s 'Smarter Travel Demonstration Areas 2012-2016'.
The idea behind the scheme is to encourage a behavioural switch to more sustainable forms of transport.
"The three areas submitted excellent proposals for transforming people’s travel behaviour, with support from local businesses and communities", Minister Kelly said.
The aims of the scheme, according to Minister Kelly, include "reducing congestion and pollution, improving road safety, creating local employment opportunities, and improving people’s health and fitness, as well as enhancing town and streetscapes locally".
The government received 39 applications for the scheme, of which 11 were shortlisted before choosing the final three. Cork City, Galway and Kilkenny submitted proposals as well as Loughrea, Navan and Dundalk.