Lincoln is among four cities and towns in the county in line for a share of £3.6bn of Government funding.
One hundred places are being invited to develop proposals for a new generation of multi-million-pound Town Deals, announced by Local Government Secretary Robert Jenrick MP.
Each town/city could potentially see an investment of up to £25 million.
Boston, Skegness, Mablethorpe, Grimsby and Scunthorpe also made the list of those eligible to place a bid.
Communities, businesses and local leaders will join forces to draw up ambitious plans to transform their town’s economic growth prospects.
There will be a focus on improved transport, broadband connectivity, skills culture.
The government will soon publish a prospectus to guide towns through the process and set eligibility criteria for funding. Decisions on funding any proposals will be made in due course.
Councillor Ric Metcalfe, Leader of City of Lincoln Council, said “We welcome this marvellous news and are very pleased that Lincoln’s further potential has been recognised in this way.
“It is a clear vote of confidence in everything we are already doing to make our city more remarkable.
“We are excited to continue working in partnership with our local communities, businesses, the Greater Lincolnshire Enterprise Partnership and other public authorities. Together, we will develop the case to secure this cash injection into the city that will allows us to continue building thriving communities, increase business competitiveness and deliver a rich and varied cultural experience.
“With partners we have developed a strong and ambitious vision for Lincoln and this funding will help accelerate delivery of it.”
Councillor Colin Davie, Executive Member for Economy and Place and. Greater Lincolnshire LEP board member, added: “I’m delighted to see the Government looking beyond London and recognising that our rural areas can make an important contribution to our national economy if given the right support.
“We know Lincolnshire has enormous potential, and this funding will give us the opportunity to prove what we can do.”
The announcement follows Prime Minister Boris Johnson’s confirmation in July of an additional £1.325 billion to support towns. It took the total value of the Towns Fund to £3.6 billion.
The Chancellor also announced this week that £241 million of the Towns Fund is available to support places in 2020-21 in the Spending Round.