The Chancellor provided £5m towards the £26m project to create a Jacobean style theatre in Prescot, subject to business case and planning approval.
Osborne said the North West “had the fastest growing arts, entertainment and recreation sector in the country in the year to 2014.”
Knowsley Council approved its own £6m investment for the project on 10 March. The plans are now scheduled to be considered by the planning committee on 21 April.
Prof Kathy Dacre, chairman of the development board of the Shakespeare North Trust, said: “The fantastic support we have received today from the Government, announced in the Chancellor’s statement, is great news for Knowsley and its continued regeneration. It endorses the vision we’ve developed over many years with the full support of Knowsley Council to bring a Playhouse and a world-class university postgraduate performance programme to Knowsley, connecting its present and future to one of our greatest playwrights William Shakespeare.
“In this, his anniversary year, we are delighted to be another big step closer to turning our shared vision into a reality.
“We are also immensely grateful to the local authority for their steadfast leadership in nurturing the project at all stages and the transformative £6m commitment they made last week, together with their gift of the land on which the theatre and college will be built.
“This is a remarkable partnership between an educational charity and local, and now national government, and we look forward to moving forward and announcing next steps and further support in the coming weeks.”
In other cultural announcements, Osborne said the government was now inviting bids from Northern cities and towns to host the Great Exhibition of the North, as trailed at the Autumn Statement in November.
It was also announced that the government will now consider supporting the creation of ‘International Screen School Manchester’, to increase the skilled workforce for the screen-based media sector in the North.