Lancashire County Council, Blackpool Council and Blackburn with Darwen Council have all agreed to submit the county's historic devolution proposal to the government for parliamentary approval.
The three councils have been working together with central government to secure a deal which will see powers and budgets devolved from central government to Lancashire.
The Lancashire Combined County Authority (CCA) aims to help address years of historically low investment in the area and provide a platform for accelerated growth.
It will provide a single body for the whole of Lancashire to champion its interests, deliver on local priorities and provide greater local accountability and decision-making powers.
In partnership with business and public service providers, including district councils, it aims to give Lancashire a stronger voice on the regional and national stage, ensuring greater benefit from funding and other opportunities.
An initial £20m capital funding will be unlocked when parliamentary approval is secured to support innovation led growth and net zero ambitions across Lancashire.
Under the government's devolution framework, it is proposed that further powers and funding will then be devolved to the CCA including for adult education.
The decision followed a public consultation which showed the majority of respondents supported the creation of a the Lancashire CCA.
Many of Lancashire's largest and most strategic employers and organisations, including all five universities operating in the county, also showed their support through both the formal consultation and letters of support.
Leading companies included Euro Garages, Eric Wright Group, Merlin Entertainments and Avanti West Coast together with business representative groups such as the Local Enterprise Partnership, East Lancashire and North and West Lancashire Chambers of Commerce and Industry all said they were in favour.
Coun Phillippa Williamson, leader of the county council, said: "This is another historic day for Lancashire and another huge stride towards our ambition of creating an even more prosperous county. Together with my fellow leaders we have a shared vision of Lancashire reaching its true potential, with local decisions made here and not in London.
"Our county is already a brilliant place to live and work. We have amazing foundations and already achieve so much, but we know we can be even better.
"This devolution deal will give us the tools to make things happen and improve our communities. It really is brilliant news for our county and I can't wait for our deal to be confirmed by parliament."
The Secretary of State is expected to lay an order in parliament to establish the new combined authority before the summer recess, with the new LCCA being established by the Autumn.
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