An extra £4bn will be given to local councils in an attempt to bridge the prosperity gap between London and the rest of the country, under plans from Ed Miliband.
By seizing back power from Whitehall, the Labour leader said, regions would be able to help create jobs and improve business opportunities outside the capital.
In a speech in Birmingham, Mr Miliband warned that UK prosperity was built "far too much" on London.
Tories accused of ignoring Lord Hestletine's review He said: "We need a prosperous London, but we also need to build prosperity outside it. Today, every region outside London is below the national average when it comes to productivity, while London is 40% above it.
"Britain will never tackle the cost of living crisis and create the new private sector jobs that are essential to doing so unless we break this pattern, reverse a century of centralisation, and change from an economy based on the success of one city to all of our country's great towns and cities: a truly One Nation economy."
The devolution pledge will be included in the Labour manifesto as the party leader attempts to "reverse a century of centralisation".
Mr Miliband also attacked the Tories for failing to take restoring power to the regions seriously by ignoring a review carried out by the Tory grandee Lord Hestletine.
He said: "Michael Heseltine's review called for a massive devolution of funding from Whitehall to the cities."
Mr Miliband said that he had asked the former Labour minister Lord Adonis to "examine every line" of the report to see what more could be done.
Under his proposals cities and towns will be able to put together an economic blueprint for their future and have new powers to allow them to fund infrastructure and economic development projects.
Sir Richard Leese of Manchester City Council welcomes the proposals They will be able to invest in transport, housing and things like apprenticeships.
The proposal was welcomed by Sir Richard Leese, leader of Manchester City Council. He said: "Independent forecasts for our cities demonstrate that, with more local freedom, we could deliver an additional £222bn and 1.3 million jobs into the economy by 2030. We therefore welcome the direction of travel set out in the statement by the Labour leader today."
Conservative Party chairman Grant Shapps said: "Once again Ed Miliband is talking about a problem which the Labour government he was at the centre of created.
"Labour's great recession made people who work hard poorer, and their unbalanced economy saw just one job created in the North and Midlands for every 10 created in the South."
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