The Scottish Government has confirmed it will invest £200 million in the Tay Cities Region Deal, calling on UK ministers to match the amount.
The initiative includes investment in Dundee, Perth, Angus and the north of Fife.
It aims to create thousands of jobs over the next 10-15 years by focusing on skills, tourism, transport and innovation.
City Region Deals are agreements between the Scottish and UK governments and local government designed to bring about “long-term strategic approaches to improving regional economies”.
Previous deals in other areas have seen Scottish and UK ministers match each other’s funding.
However the UK Government is yet to confirm how much it will commit to the Tay cities project.
An announcement could be made in the Chancellor Philip Hammond’s Budget on Monday.
Infrastructure Secretary, Michael Matheson said: “Scotland’s cities and their regions are the engines of our economy.
“That is why I can confirm that the Scottish Government has agreed to invest £200 million in the Tay Cities Region, to deliver significant long-term economic benefits.
“A Tay Cities Region Deal of this scale has the power to build on the area’s significant strengths and expertise.”
He added: “I expect City Region Deals to be funded on a 50:50 basis and I call on the UK Government to match our commitment and make this a £400 million deal.
“The Tay Cities Region includes Dundee, Perth, Angus and the north of Fife.
“This investment will help the region continue to thrive and grow, fulfilling our ambitions for the region to be one of the most economically and culturally vibrant areas in the country and delivering benefits to the whole of Scotland.”
Tim Allan, president of Scottish Chambers of Commerce, said: “We welcome the announcement from the Scottish Government to commit £200 million to the important Tay Cities Deal.
“It is now over to the Chancellor to match the ambition and momentum of the Scottish Government, and to match the figure so we can achieve maximum impact for the region.
“It is critical the Chancellor rises to the challenge, with pace, and put business and enterprise at the heart of his Budget.”
A UK Government spokeswoman said: “The Tay Cities deal will bring transformative change to the region.
“The UK Government’s commitment will be based on our assessment of the projects that have come forward – not on arbitrary challenges.
“We expect to announce further progress very soon and will move quickly towards signing Heads of Terms following discussions with the partners.
“It is essential for the future of the City Deals programme – which has already seen the UK Government commit more than £1 billion to Scotland’s cities – that partners work collaboratively.”