Subject to agreement, Cheshire East Council and Greater Manchester Combined Authority will enter into a pilot for full retention of business rates growth from April 1st, 2015.
Under current arrangements, 50 per cent of business rates growth income is retained locally and 50 per cent returned to central government, but the pilot, which will also be trialled in Cambridge, will test whether full retention of business rates can be rolled out as a national fiscal model.
Reacting to the news, Council Leader Councillor Michael Jones, said: "This is fantastic news and something we have been pressing for, for some time. It means we get to keep more of the business rates that we generate locally.
"Cheshire East has created the right conditions to attract private sector investment, jobs, growth and confidence. This announcement will helps us to build on this success and invest even more into the local economy and to continue to put our residents first.
"We are delighted to be at the forefront of the Chancellor's new pilot to encourage and incentivise growth in local businesses and to work alongside Greater Manchester to trial this.
"We embrace innovation and have a strong commitment to economic growth and prosperity for all.
"Cheshire East Council has the largest number of small and medium sized businesses in the North West and contributes significantly as one of the economic powerhouses of the north and for the UK.
"This initiative will help to attract further investment, jobs and opportunities for the people who live and work here.
"This will become all the more important as we move towards more devolved government. Cheshire East is in a strong economic position in the North West."
Lord Peter Smith, Chair of Greater Manchester Combined Authority, said: "We have long made the case that capturing the benefits of growth is a key part of our ambition to secure fiscal devolution for Greater Manchester.
"Stimulating growth, and helping our residents benefit from it, is already a key priority for GMCA. This announcement means we will be able to keep more of the proceeds of growth within the area - rather than handing them over to central government – and reinvest them in measures designed to encourage further growth here.
"It will be a virtuous circle and we can only gain and not lose funding through this new arrangement.
"This is another significant step in the right direction and is another example of Greater Manchester being at the heart of innovation. It comes on top of November's ground-breaking devolution deal and last month's agreement to devolve the health and social care to Greater Manchester.
"We hope this latest announcement will be the first step to full business rates devolution as we continue our journey towards a financially self-sustaining Greater Manchester."
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It is also good news that the Government will be reviewing business rates for high street retailers. I agree with the calls for lower parking charges and more free parking in our towns, but the biggest problem facing retailers in Wilmslow is not footfall but rates and rents. If we want thriving town centres then we need to make it more affordable for shops to operate.