The Minister made the announcement as part of a raft of measures to improve cycling access in the capital.
Work on the flagship Sutton to Sandycove Cycle Route will also be advanced by the department, as well a study into inter-urban cycle routes.
Mr Dempsey said that by 2020 around 160,000 people will commute to work on bikes, prompting the government to take affirmative action to ensure adequate infrastructure.
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Launching Ireland's First National Cycle Policy Framework, the Minister said: "Cyclists matter. Just like other road users they deserve a safer, easier travelling experience and that's what I want to deliver through the 109 individual actions set out in this policy."
Mr Dempsey said he aims to have 10% of commuter travelling on two wheels daily, within 10 years.
"I am determined that we will have a world class cycling infrastructure in place in this country by 2020 so that biking becomes a safe and enjoyable option for commuters and school kids alike," he said.
A new approach will be taken when designing urban roads to better recognise the needs of cyclists and pedestrian, according to Mr Dempsey.
There will also be improved maintenance of road surfaces used by cyclists.
(PR/JM)
