The town, which has slightly over 80,000 residents, must promise to cover up to $21 million (£13.5 million/€16.4 million) of velodrome building costs by the end of next month while the town hopes that the velodrome facility can be built alongside a planned Education Village, which is a proposed new satellite campus for Wilfrid Laurier University.

"Toronto 2015 is pleased to announce that Milton Education Village is now being considered as the selected site for the Toronto 2015 Pan/Parapan American Games velodrome," said the Organising Committee chief executive Ian Troop.

"This confirmation is conditional upon receiving a binding agreement from the Town on or before January 24, 2012.

"Toronto 2015 looks forward to working with city officials over the next few weeks to help finalise the operating programme for the velodrome to ensure a world-class cycling hub for Milton.

"We are pleased the town and its community members, including the generous participation of Mattamy Homes' founder Peter Gilgan, have embraced the value of this legacy venue."

The Pan American Games are the world's second-largest international multi-sport event behind the Olympic Games.

At Toronto 2015, around 8,000 athletes from 41 nations will compete across 37 sports, with the Pan American Games taking place from July 10-26 and the Parapan American Games from August 7-14.

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