For metropolises like Beijing, heavy congestions cause transit passengers’ unreliable travel time, including in vehicle time and waiting time. Comparing with other managerial measures, designing a lane for bus use only is an effective method to improve travel reliability, for it can eliminate the influence on bus-driving conditions. This paper proposes a reliable and practical method to determine exclusive bus lanes (EBL). A reliability-based optimization model is established, in which the tradeoff among bus and private car passengers’ travel time, reliability, and EBL construction cost are considered. Based on the actual network, a user equilibrium demand assignment model is applied to estimate the dynamic bus flow distribution. Since the model is nonlinear, a two-step method is proposed where tangent lines are introduced to constitute an envelope curve to linearize the model. This work conducts the statistical modeling and fitting analysis with actual bus trajectory data, collected on EBL in Beijing during peak hours. Passenger travel time distributions are fitted to estimate the statistical passenger travel time; Lognormal distribution and Gaussian distribution are the best fit. The optimization results indicate that the passenger travel time reliability can be improved by 5.5% by the optimized EBL location scheme. This study will provide a theoretical basis and methodological support for improving the service level of the public transportation system in large cities through the scientific planning of exclusive bus lanes.