South Yorkshire has been named as the first of the twelve investment zones announced by chancellor Jeremy Hunt in March.
Based at the AMRC research institute at Sheffield University, Hunt said the new zone would create 8,000 jobs with £80mln of investment already secured from private companies.
Hunt’s plan is for 12 UK investment zones eventually, with a target to bring in investment of £1.2bn in total.
Boeing, Spirit AeroSystems, Loop Technology and the AMRC Institute have already indicated support for the first round of investment, said the Treasury.
The project, which also has support from the South Yorkshire Mayoral Combined Authority and the University of Sheffield, would see the UK "at the cutting edge of aviation research, development and manufacturing," said a government statement.
Hunt commented: "Our first Investment Zone is a shining example of how we will drive growth across the country.
"It's already secured more than £80mln of private investment, including backing from Boeing, and will help support more than 8,000 jobs by 2030."