Sunderland City Council selected Carillion a year ago to be its strategic partner to deliver the city's regeneration programme over the next 20 years. (See previous report here.)
The council and contractor have finally agreed terms for a joint venture and achieved financial close.
The JV company is called Siglion and has appointed Igloo Regeneration to provide development and asset management services.
Sunderland City Council leader Paul Watson said: "It's fantastic news that Siglion can now drive forward the city's largest-ever development programme. The signing of this contract is a major step forward in propelling regeneration and economic growth that will transform key city sites.
"It also ramps up our ability to attract new investment, following on the major works currently being carried out in Sunderland. We are excited about working with our partners who are as committed as we are to the long-term success of the city."