Chancellor John Healey will use Wednesday's Budget to put £7m into a full feasibility study for an Olympic and Paralympic Games hosted across northern England in the 2040s, the government confirmed on Saturday.
The money pays for a study of whether the UK should bid, not for a bid itself. It is the first time a figure has been attached to the project since the Department for Culture, Media and Sport commissioned UK Sport in May to assess whether the North could host the Games.
Healey said: "The north hosting an event as big as this would be truly unforgettable.
"Britain's experience of London 2012 is proof we can host the world.
"It will lift communities, create opportunities and give the UK a huge boost."
The announcement is a personal as well as a political step for Prime Minister Andy Burnham, who signed a letter from the Great North mayors asking the government to anchor any future UK bid in the North of England while he was Mayor of Greater Manchester. He became Prime Minister on 20 July, when Healey, who had resigned as Defence Secretary in June, became Chancellor. Wednesday's statement is Healey's first Budget as Chancellor.
Burnham told the BBC: "Few things bring a country together quite like the Olympics," adding: "The Games would unlock opportunity across our towns and cities for the whole country.
"From north to south, it would be something everyone could get behind and be proud of.
"We know we can put on the greatest show on earth. Now we want to explore how we can do it again, with the whole country behind it."
The study will be carried out by the government, UK Sport, the northern mayors and the British Olympic and Paralympic associations, according to the BBC and the Press Association. It will examine the venues and transport links a Games would need, how cities could share the event, the benefit to communities, the cost and the chances of a bid winning.
The government has not said whether the £7m is new money or reallocated from an existing budget, which department will pay it, or how long the study will take. The figure is expected to appear in the Treasury's Budget documents on Wednesday.
UK Sport has submitted the initial strategic assessment commissioned in May, according to Esther Britten, its deputy director and head of major events, who spoke to SportsPro at the SportAccord Forum in Lausanne this month. The assessment has not been published, and its findings have not been disclosed.
Britten also signalled caution over the cost of staging major events. "UK Sport had always considered that there was no way we could be a partner to the Olympic and Paralympic movement again before the 2040s," she told SportsPro, adding: "We have increasingly had to say no to some events."
The 2012 Games in London cost an estimated £8.9bn, according to a 2013 government estimate cited by the BBC, most of it from public funds. London is the only UK city to have hosted the Olympics, in 1908, 1948 and 2012. Manchester bid for the 1996 and 2000 Games and finished third in the contest for 2000.
The May commission, issued under the Starmer government, said the assessment's findings would determine whether a more detailed feasibility study went ahead. The Great North mayors' letter had asked for agreement in principle that any bid be based in the North, government support for feasibility work and early agreement on legacy objectives. Signatories included Kim McGuinness, the North East Mayor and chair of The Great North, Tracy Brabin, Oliver Coppard, David Skaith and Luke Campbell.
A spokesperson for Sadiq Khan, the Mayor of London, said in May that leaving London out of a bid would be "a missed opportunity".
More than 40 Olympians, Paralympians and elite athletes have signed a joint statement in support of a Games in the north of England, the Guardian reported, among them Dame Laura Kenny, Dame Sarah Storey and Tom Pidcock. Manchester City Council welcomed the funding, according to the Press Association.
The Budget will be delivered to the Commons on Wednesday 28 October.
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