Plans to build a huge film and TV studios in Eastern England have taken another step forward.

North East mayor Kim McGuinness and the region’s council leaders gave the sign-off on Tuesday afternoon to progress their initial $32m funding for the Crown Works Studios – and are preparing to make more investment in the “transformational” project. It is hoped that plans from FulwellCain, a partnership between global entertainment company Fulwell 73 and Cain International, to build the studios on the banks of the River Wear in Pallion will create thousands of jobs and deliver an enormous boost for the North East’s creative industries.

The $560m(£450 million) development was given planning permission by Sunderland City Council in March and has backing from the North East Combined Authority (NECA), led by the newly-elected mayor, to help make it a reality. At a meeting in Gateshead on Tuesday afternoon, the NECA cabinet formally approved the “trailblazer” devolution deal announced earlier this year which includes a £25 million cash injection for the regeneration of the Sunderland riverside.

It also agreed that NECA officials and Sunderland City Council will draw up proposals for further investment into the Crown Works project that will help it meet its ambition to become “the largest studio complex outside London and the South East and an opportunity for world-class film and TV production”. Ms McGuinness’ cabinet also backed £2.5 million of continued investment in the North East Screen Industries Partnership, a partnership between local authorities and the BBC to grow the region’s TV and film sectors.

The Labour mayor said: “We are absolutely committed to cultural and creative industries and to treating those sectors not as an add-on, not as something that is just nice to have, but as an area where we want to to create jobs right across the region and really lead on in this country.”

The trailblazer deal, which was signed at a ceremony in Durham in March, also includes £5 million for Newcastle University’s regeneration of the city’s old general hospital site into a new ‘Health Innovation Neighbourhood’ and another £5 million towards the regeneration of the Forth Yards area. Ms McGuinness teased that NECA would have an “awful lot of really exciting stuff” that would be announced after the general election, once the ‘purdah’ restrictions on local authority’s announcements are lifted.

She added: “It is a great start but I believe we are capable of more. We know that people want to have more of a say over their own future and to be able to hold us to account for creating that opportunity, fixing our public transport, building more social housing, creating more jobs, and upskilling people straight across the North East.”