Twenty more areas, including two in the North East, are to be given greater independence from Whitehall in a bid to help them boost regional economic growth, Deputy Prime Minister Nick Clegg has announced.
The "cities" are to enter negotiations with the Government to take on powers and responsibilities that will give them greater scope to thrive.
City Deals will give participating areas the ability to use budgets better for local needs such as training and skills, roads and other developments.
In return, the areas must demonstrate they have a strong plan for local growth. The Government said it would work closely with cities to negotiate a deal over the next year.
The two areas announced from the North East are Sunderland and Tees Valley.
"Even more places will be free from Whitehall control and have the tools to power their own growth.
These deals help cities and their wider areas make once in a generation changes that will be felt by everyone.
Letting go of power and money doesn't come naturally to Whitehall.
Over time, the economic importance of other parts of the country has been devastatingly downplayed, as the economic elite have narrowed the debate towards a London-centric view.
Rather than let our industries and communities wither, we need to free up cities outside of London that have their own unique selling points."
– Nick Clegg, Deputy Prime Minister
"City deals are a quiet revolution in the way Britain is governed.
Rather than London laying down the law, cities have the right to do things their way.
The stories of their own futures will be as individual as their unique histories."
– Greg Clark, Financial Secretary to the Treasury and Minister for Cities