Aberdeen has been allocated £504m government investment to improve infrastructure and jobs over the next 10 years.
A £250m City Deal for Aberdeen will see the UK and Scottish governments jointly invest in the area.
The City Deal agreement includes funding for an energy innovation centre and the expansion of Aberdeen harbour to aid the city in competing for decommissioning work in the oil and gas sector.
Separately, the Scottish government has pledged another £254m to Aberdeen and Aberdeenshire.
The City Deal began in England where it was connected with devolving power and empowering cities such as Manchester.
Public sector investment under City Deals are designed to be leverage that catalyses investment from the private sector.
There is a City Deal in Glasgow, where a large number of local authorities are working together.
The Aberdeen deal is more similar to a joint investment package and will not involve political devolution to the area.
Derren McRae, managing director of property consultancy CBRE in Aberdeen, said: “City Deals have been an established part of the economic development agenda for cities in England for some time and projects emerging from the Glasgow and Clyde Valley City Deal suggest that such interventions can create a future platform for new development and investment from both private and public sectors.
“But the City Deal is not a quick fix for short-term issues; what it will do is release much-needed investment into physical and digital infrastructure, and that in turn will allow the private sector to see a better long-term future for new investment.
“As a single package of interventions, it is also important not to expect the City Deal to address all challenges. Rather, it is a significant part of a wider menu of actions which will collectively be needed to allow Aberdeen and the North East to transition into the next phase of positive economic growth.”
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