The Derry and Strabane City Deal will move a step closer with the signing of the Heads of Terms.
Some £210 million in funding is being provided equally by the Executive and the Westminster government, as well as a further £40 million investment from Derry City and Strabane District Council.
It is set to support the new Graduate Entry Medical School at Magee as well as projects in digital communications.
Northern Ireland Secretary Brandon Lewis said funding is to support and encourage economic development across the region, create jobs, boost opportunity and encourage further inward investment.
First Minister Arlene Foster said it is an "important milestone" in the progress of the City Deal.
"There is a real sense of vibrancy and ambition in the North West. The Executive is working with the UK government, the council and a wide range of stakeholders to turn that potential into reality through collaboration and innovation," she said.
Deputy First Minister Michelle O'Neill said: "Our investment in the Derry City and Strabane District Council City Deal is a mark of that commitment. Alongside the many ongoing projects to transform the area, this will be a game-changer for the regional economy, driving growth and creating opportunities for people."
Mayor of Derry City and Strabane Brian Tierney said it is the "single largest investment by government to our region".
"A funding package of this scale and magnitude will be felt not only in the Derry City and Strabane District Council area, but across the wider North West region and beyond, and will deliver a stronger, more resilient and regionally balanced economy," he said.
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