Councillor Carl Les, leader of North Yorkshire County Council, said he was "greatly encouraged" by announcements in the government's Levelling Up white paper which promises “the largest devolution of power from Whitehall to local leaders across England in modern times".
A deal for North Yorkshire and York was first announced in July last year and if agreed could lead to a shift in decision-making powers and billions of pounds in funding controlled by a mayor.
Councillor Les, who previously expressed frustration over a lack of speed in the negotiations, said he was now pleased to see some long-awaited progress.
He told a press conference today: "We have been talking about devolution for parts of Yorkshire for five or six years and there have been numerous false starts.
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"I'm pleased we have now got here to this stage and I'm very excited about moving forward.
"This is an exciting opportunity not just for York and North Yorkshire, but for the whole country because we know there has been a north/south divide for many years."
The government had stipulated a key requirement of any devolution deal for North Yorkshire was for the current two-tier councils system to be replaced by a single unitary authority.
A new North Yorkshire Council has since been agreed and will launch in April 2023 when the area's county and district councils will be scrapped.
Elections to the new council will take place this May, while City of York Council will remain as a separate unitary authority.
City of York Council leader councillor Keith Aspden said in a joint-statement with councillor Les that they wanted to see North Yorkshire and York become “the first city-region rural powerhouse to make devolution a reality".
They said: “Devolution can unlock significant, long-term, investment for this region, driving growth and contributing to a stronger northern economy.
"It has the potential to bring improvements to areas such as public transport, infrastructure, support for businesses, education and skills, benefiting the people who live and work here.
“A devolution deal could also help deliver an ambition for this region to become England’s first carbon negative economy.
"We therefore welcome the commitment shown for levelling up and devolution in this announcement.”
In 2020, councils across North Yorkshire submitted a list of devolution requests to government which included £2.4billion worth of spending.
A separate funding pot worth £750million over 25 years was also included, as well as powers over areas such as transport and economic development.
These would come under the control of a directly-elected mayor who would represent both North Yorkshire and York on a new combined authority with further powers on skills, regeneration and energy.
The mayor could also take on the responsibilities of the North Yorkshire Police, Fire and Crime Commissioner.
Negotiations towards a deal between government ministers and council leaders are set to take place in the coming weeks.
If successful, a North Yorkshire and York combined authority could be created in 2023 before mayoral elections the following year.
By Jacob Webster, Local Democracy Reporter