Voters in Yorkshire and the Humber are to be given the chance to decide whether the area should have a regional assembly.
A referendum could be held in autumn 2004
Deputy Prime Minister John Prescott told the House of Commons on Monday the ballot would take place in autumn 2004.
The region is one of three, along with the North East and North West, to be given the chance to form its own elected body.
In the meantime the Boundary Commission will carry out a study and recommend two options for each region on which layer of current local government should be removed to make way for the new structure.
Speaking to BBC Look North Mr Prescott, who is also MP for Hull East, said: "I want to see people in Yorkshire making decisions about Yorkshire's development.
"I am going to give the people the choice. We (the government) are not going to make the decision the people can."
In a BBC telephone survey for Look North 90% of over 5,000 callers said they were against the idea of a regional assembly.
Mr Prescott said at least 50,000 people had been involved in the consultation to "sound out" interest in the idea.
The government has said the assembly could be up and running within the next four years.
The powers of the new assemblies have not been fixed, but are likely to include housing, transport, regeneration and tourism.
Local reaction to the decision has been mixed with opponents claiming devolution is not required.
However, Jane Thomas, director of the Campaign for Yorkshire, believes the announcement is a vital step.
She said: "The referendum is important because it is the people who should decide about the future of the region.
"A directly-elected regional assembly will give Yorkshire a voice.
"In 20 years time we will look back and be appalled that for so long we were run by people who don't understand our needs."
But Suzanne Hart, who was recently named Yorkshire Businesswoman of the Year, said she cannot see the need for change.
She said: "We have already got Yorkshire Forward, a Yorkshire development agency, local authorities and parish councils.
"There are also other little combinations of people who are doing things in Yorkshire.
"I can't see the rationale for having a regional assembly."
In North Yorkshire, the establishment of an elected regional assembly would bring the biggest changes to local government for 30 years.
The present system of a county council and seven district councils could make way for an elected assembly.
An assembly could mean the end of North Yorkshire County Council
It would mean the county would have to switch to the unitary system that exists in the rest of the region.
It could mean job losses as the county and district councils employ more than 20,000 people.
Conservative deputy leader of North Yorkshire County Council, Murray Naylor, said: "I don't believe the delivery of services is going to be improved by yet another upheaval of local government."
A campaign against the regional assembly is gathering speed in North Lincolnshire.
The Conservative-led council says people would lose out if decisions were made miles away in Yorkshire.