Prime Minister David Cameron and the Scottish Government have each agreed to invest £500million in improving infrastructure in the Clyde Valley area, with local councils contributing a further £130m.
It will result in 15,000 construction jobs and 28,000 permanent additional jobs once construction is complete, and will unlock £3.3bn of private sector investment.
Representatives from Westminster and Holyrood joined council leaders in Glasgow Science Centre to sign the largest deal of its kind in the UK.
They included Glasgow City Council leader Gordon Mathe-son, Chief Secretary to the Treasury Danny Alexander and Scottish Local Govern-ment Minister Derek Mackay.
They were joined by council leaders from seven neighbour-ing local authorities.
A total of 20 schemes will benefit from the cash, includ-ing a new Glasgow Airport Rail Link and improvements to city centre public realm.
Mr Alexander said the City Deal ensured Glasgow is prepared for challenges.
He said: "It will pay for investment in 20 different infrastructure schemes, including the regeneration of the Clyde waterfront, improv-ing transport links to the airport and opening up new housing sites across the city."
Mr Matheson said: "The signing of this City Deal is a momentous day for the Glasgow City region.
"The benefit this funding will bring to our infrastruc-ture, economy and labour market will be felt for decades through tens of thousands of new jobs and increased competitiveness."