New devolution deals will see north-east England given extra powers and a financial boost.
Chancellor George Osborne hailed the "historic" deals with the North East Combined Authority, which takes in councils including Newcastle and Sunderland, and Tees Valley.
The measures will mean that both areas will vote in a directly elected mayor in 2017, despite claims there was no appetite for a "Geordie Boris".
The North East deal transfers powers over transport, strategic planning, employment and skills from Whitehall to the region.
It enables the authority to create an investment fund with an initial allocation of funding for capital financing of at least £30 million a year for 30 years.
The Tees Valley deal will see its investment fund guaranteed at least £15 million a year, with similar powers to the North East devolved from central government.
The Chancellor said: "Our devolution revolution is gathering an unstoppable momentum and I am delighted that again the Northern Powerhouse is leading the way.
"These historic agreements are thanks to the hard work and vision of the civic leaders of both the North East and Tees Valley who have worked with me to embrace a once in a generation opportunity that will change the shape of local government forever in their regions.
"The old model of trying to run everything in our country from the centre of London is broken.
"It has led to an unbalanced economy and made people feel remote from the decisions that affect their lives.
It has not been good for our democracy or our prosperity.
"I am determined to end this situation and I want to thank those civic leaders who want to work with us to achieve it."
Concerns about the Government's plans for regional and city deals, which require the election of a London-style mayor to provide accountability, were raised in the Commons earlier this month.
The Government was told not everyone wanted a Boris Johnson-type figure in charge of everything, amid fears that areas would be forced to adopt one.
During debate on the legislation for devolving powers, Blyth Valley's Labour MP Ronnie Campbell told ministers: "In the north-east of England it seems as though you are imposing a mayor on the leaders and the feeling in the North East is that they don't want the Geordie Boris."