Hartlepool, Darlington, Middlesbrough, Redcar and Thornaby have been awarded the funding as part of the Ministry of Housing, Communities and Local Government’s Towns Fund programme.
A total of £843,125 is being made available in capacity funding to enable the councils to develop business plans.
They will each then be able to bid for up to £25million in funding as part of the Government’s £3.6billion Towns Fund.
With five towns from the region included, the Tees Valley will receive more allocations than any other City Region in the UK.
The funding will allow communities across the Tees Valley to work with businesses and local leaders to draw up ambitious plans to transform their town’s economic growth prospects with a focus on improved transport, broadband connectivity, skills and culture.
The councils will now bring together a Town Deal Board, including representatives from across the public, private and voluntary sectors to create business plans, by summer 2020.
For further information on the governments Town Fund visit : www.gov.uk/government/news/100-places-to-benefit-from-new-towns-fund