Hundreds of jobs and up to 2,000 homes are being planned for Shoreham Harbour.
Brighton and Hove City Council is working on a project with two other councils and Shoreham Port Authority.
Brighton and Hove council leader Mary Mears said: “I am delighted that we have a new joint vision and a viable scheme that supports the economy.
“It will create new jobs at the port and for local businesses and lead to much-needed new homes.
“The three councils and the port authority have put residents and businesses at the heart of their decision-making to deliver a project that will benefit the whole of Sussex.”
The three councils – Adur District Council and West Sussex County Council as wellas Brighton and Hove – have carried out a preliminary study with the port authority.
They have looked at transport, capacity and flood defence issues.
They hope that the scheme will create up to 2,400 jobs over the next 15 to 20 years as up to 2,000 homes are built and new businesses are attracted to the port.
New homes and business premises are expected at Aldrington Basin, at the Hove end, South Portslade and the Western Arm – on the north side of the river from Shoreham town centre to Kingston Beach.
Shoreham Port Authority recently published its own masterplan setting out the future for the port and highlighting the potential for further growth.
It foresees up to 500 new jobs and significant investment in new port facilities over the next few years.
Adur council leader Neil Parkin, said: “The councils and the port authority want to send a clear, single and united message to business, investors and developers that we have the plans and the vision to see Shoreham Harbour develop successfully.”
Councillor Deborah Urquhart, the West Sussex cabinet member for environment and economy, said: “This joint partnership approach, working together to agree a new vision for Shoreham Harbour, has reached a key milestone.
“The port and surrounding area is a tremendous investment opportunity.
“We have set the foundations and want to work with the port, local people and businesses to turn this vision into a reality with new jobs and a great living and working environment.”
Peter Davies, development director at Shoreham Port Authority, said: “We very much welcome the emphasis on employment-led regeneration and fully support the shared vision for the area that fits well with our ambitions for the port.”
Earlier plans for the harbour and surrounding area looked at the potential for up to 10,000 homes.
This would have involved reclaiming land from the sea and for the relocation of some of the existing port operations freeing up existing port land for redevelopment.
This was not considered to be a realistic option in the current economic climate.
Public consultation on the new plans will take place later this year.
