Last week, Prime Minister David Cameron announced the UK government will give the city a £500million grant for infrastructure projects.
The Scottish Government quickly announced it would match the City Deal cash - with councils investing the rest - which will fund a wide range of projects, including a possible rail link to Glasgow Airport.
Business leaders and university bosses have all welcomed the investment which they believe will provide a major boost for the city.
Professor Pamela Gillies, Principal and Vice Chance-llor of Glasgow Caledonian University, described the City Deal announcement as a tremendous vote of confidence in the people and leadership of the city.
She said: "Such a significant investment will allow the city to become a world-leading business centre, creating thousands of new jobs in the process.
"Every sector will benefit from the new infrastructure fund, including higher education.
"The additional economic activity, estimated at £1.75bn a year, will help tackle inequalities in health which have bedevilled Glasgow for generations."
Chamber of Commerce chief executive Stuart Patrick said the investment was fantastic news.
He said: "This City Deal has the potential to deliver significant economic and jobs growth.
"The model has a proven track record in England, boosting the economies of many of our competitor cities.
"It will involve investment in economic infrastructure across the local authorities that make up the real Glasgow economy to promote economic growth.
"Secondly it requires firm discipline in agreeing the projects, giving the local authorities a genuine incentive to choose projects that improve the economy and create jobs."
A Glasgow Airport spokesman said City Deal status would stimulate greater investment and economic activity.
He added: "We welcome the inclusion of the airport rail link as a priority and look forward to working with our partners to deliver this critical project."
Professor Sir Jim McDonald, Principal of Strathclyde University also welcomed the cash injection which will support the city's economy and create more than 28,000 jobs.
He said: "The news of Glasgow's success in attracting the City Deal investment comes at an ideal time in the city's economic renaissance.
"This exciting award reflects the joint ambition and vision of the public, private and academic part-ners that have developed in Glasgow in recent years."
Martin Little, chairman of the Glasgow branch of the Federation of Small Businesses demanded a reassurance small, local firms will benefit.
He said: "Many Glasweg-ian small businesses will be thrilled at the news that additional investment is coming to Scotland's largest city.
"The 1200 FSB members in Glasgow will want to understand what the money will mean for their part of the city and how these new plans dovetail with regen-eration measures in the pipeline.
"We need to ensure small local contractors get a fair share of the public contracts."