We consider five-dimensional gravity with a Gauss-Bonnet term in the bulk and an induced gravity term on a 2-brane of codimension-2. We show that this system admits BTZ black holes on the 2-brane which are extended into the bulk with regular horizons.A growing interest in codimension-2 braneworlds, i.e a brane embedded in a bulk with two extra dimensions, has recently appeared. The most attractive feature of these models is that the vacuum energy (tension) of the brane instead of curving the brane world-volume, merely induces a deficit angle in the bulk around the brane [1]. This property was used to solve the cosmological constant problem [2]. However, soon it was realized [3] that one can only find nonsingular solutions if the brane stress tensor is proportional to its induced metric. To obtain the Einstein equation on the brane one has to introduce a cut-off (brane thickness) [4], loosing the predictability of the theory, or alternatively, one can modify the gravitational action by including a Gauss-Bonnet term [5] or a scalar curvature term (induced gravity) on the brane [6].We still lack an understanding of time dependent cosmological solutions in codimension-2 braneworlds. In the thin brane limit, because the energy momentum tensors on the brane and in the bulk are related, we cannot get the standard cosmology on the brane [7,8]. One then has to regularize the codimension-2 branes by introducing some thickness and then consider matter on them [9,10]. A cosmological evolution on the regularized branes requires an expanding brane world-volume and in general also a time evolving bulk. An alternatively approach was followed in [11] by considering a codimension-1 brane moving in the regularized static background. The resulting cosmology, however, was unrealistic having a negative Newton's constant (for a review see [12]).Moreover, the issue of localization of a black hole on the brane and its extension to the bulk is not fully understood. In codimension-1 braneworlds, a first attempt was to consider the black string extension in the bulk of a Schwarzschild metric [13]. Unfortunately, this string is unstable to classical linear perturbations [14] (for a review see [15]). Further attempts deal with the Einstein equations projected on the brane, which include an unknown bulk dependent term, the Weyl tensor projection. Due to this reason the system is not closed, and some assumptions have to be made either in the form of the metric or in the Weyl term [16]. The stability and thermodynamics of these solutions were worked out in [17].A lower dimensional version of a black hole living on a (2+1)-dimensional braneworld was considered in [18] by Emparan, Horowitz, and Myers. They based their analysis on the so-called C-metric [19] modified by a cosmological constant term. They found a BTZ black hole [20] on the brane which can be extended as a BTZ string in a four-dimensional AdS bulk. Their thermodynamical stability analysis showed that the black string remains a stable configuration when its transverse size is compara...