A EURO funding jackpot potentially worth up to £33 million is expected to create a jobs bonanza for the district.
Lancaster and Morecambe have been declared an ' Economic Development Zone,' which means the area will attract nearly £8 million from the European Development fund.
A further £12 million is expected to come from UK regeneration funding sources and the rest will be made up by private investors.
As an Economic Development Zone the district is expected to experience a jobs bonanza with an estimated 1,500 new jobs being created as a result of the funding boost.
The Euro money will be specifically targeted at transforming the district into a regional centre for information and communications technology and reclaiming old and derelict industrial sites for housing and business.
Developments in the city will also be linked to a separate successful bid by Lancaster University for the development of a regional centre for Information Technology on campus at Bailrigg.
Regeneration cabinet member, Cllr James Airey, said: "This is spectacular news for the district.
The four-year injection of funding will go a long way to solving some of Lancaster's oldest and most intractable problems.
Areas of industrial blight will be transformed and new housing will attract people and life back to the fringes of the City Centre.
Hundreds of jobs will be created and existing companies will be encouraged to invest further in their businesses.
I want to congratulate everyone associated with the preparation of this successful bid."
The economic development zone will be concentrated around the Luneside area of Lancaster, where a new 'waterfront urban village' will be created and the Williamson's factory complex regenerated.
Other sites likely to benefit include Lancaster Business Park on Caton Road, Mellishaw North and the Kingsway site.
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