The cash was announced during the Autumn Budget on October 27 by Chancellor Rishi Sunak.
Mr Sunak announced £6.9bn towards train, tram, bus and cycle projects - of which South Yorkshire will receive £570m.
Although there are no details yet of where the roundabout will be, or what it will look like, Barnsley’s MP and council transport portfolio holder have welcomed the funding, and say they await further details.
Dutch-style roundabouts give priority to cyclists and pedestrians, and have a narrower carriageway which forces vehicles to slow down on approach.
Dan Jarvis, Barnsley Central MP and South Yorkshire Mayor said: “Barnsley and South Yorkshire needs and deserves a world-class transport network. That’s why I’ve fought hard to secure the transformative investment we need and repeatedly called on the Government to match our ambition. It is welcome that they have finally got the message.
“Passengers in Barnsley and South Yorkshire will benefit from faster bus services, upgraded shelters and stops, better rail stations and a massive expansion in high-quality walking and cycle routes - including the creation of an innovative Dutch-style roundabout for Barnsley town centre.
“I’m building a stronger, greener, fairer South Yorkshire and this settlement marks a big step forward on that journey.
Coun Chris Lamb, cabinet spokesperson for place (environment and transport), said: “Barnsley already has ambitious plans for economic growth, improved quality of life, better jobs, homes and services to benefit our residents and enable everyone to be the best they can be.
“While we have not yet seen the full details of what has been agreed, we are delighted to receive further funding.
“This multi-million-pound investment in active travel will enable us to deliver better-connected transport networks of high quality, affordable and inclusive travel, a cleaner environment and a healthier population, and I thank our cycle forum members for their support and collaboration so far.
“As plans progress, we will be seeking the views of Barnsley cyclists, pedestrians, disabled groups and other road users on design and locations.”
The UK's first Dutch-style roundabout opened in Cambridge in 2020 and Sheffield was the first location in Yorkshire that was confirmed to be getting one.