Middlesbrough and Hartlepool will be regenerated through two new development corporations, Michael Gove has announced.
The Levelling Up Secretary said the mayor of Tees Valley, Ben Houchen, will get new powers with the corporations to revamp both town centres.
Mr Gove was speaking at the Convention of the North in Manchester, a gathering of major political figures in the North of England.
The Secretary of State for Levelling Up, Housing and Communities also announced £30 million for Greater Manchester and the West Midlands to improve social housing.
Since 2010, Conservative governments have given more powers, responsibilities and spending to city region mayors and other local political leaders outside London, with Manchester, Liverpool, Sheffield and Birmingham leading the way.
The Government wants the North’s economic performance to catch up with that of London and the South East, to spread growth and prosperity across the country.
In a major speech on the plan to narrow the gap between North and South, Mr Gove also said the Government wanted to see more devolution in Cumbria, Lancashire, Cheshire, Warrington, Hull and East Yorkshire.
Mr Gove said: “As well as deepening devolution we must also broaden it.
“I am very conscious that the mayoral model has its critics and sceptics. I am particularly conscious that communities on the periphery of mayoral geographies sometimes worry that their needs can be overlooked.
“But I do not think there is a tension between Manchester’s success and Bury’s, or Sunderland’s growth and Spennymoor’s, or indeed Newcastle’s prosperity and Blyth’s regeneration.
“Attracting investment to magnet cities is a necessary part of reviving the economic fortunes of satellite towns.
“And indeed, if we unlock the potential of our major cities, then the whole country benefits. Improving the productivity of the nine UK second cities will add billions to the UK economy.”