The planning application, submitted to Wiltshire Council, also includes a pedestrian and off-road cycle route, locks, pedestrian and road bridges, a new weir on the River Avon and a hydro-electric turbine.
The proposed changes would see Highwood Road become a single-carriage dedicated bus and cycle route between Coniston Road and The Boulevard, with two-way traffic permitted between the Standing Stone roundabout and Coniston Road.
The bridge will also provide the final link completing the six-and-a-half mile (10.5km) circular Bay Edge Walkway and cycle route and connect it into the Vale of Glamorgan.
Torbay's share, which followed a bid by Torbay Development Agency, will support the development of start-up businesses, social enterprises and an apprenticeship scheme and a new cycle route around Cockington.