Manchester City Council is to create two organisations in a bid to help companies meet new green targets, including a 60% cut in annual CO2 emissions.
The Manchester Carbon Reduction Innovation & Investment Fund and Manchester Offset will help businesses devise and implement ideas on how they can reduce their own emissions.
Partner organisations will be asked to match the £1m initial investment in the initiative.
In a bid to reach its goal of being a low carbon city by 2020, Manchester is recommending that it adopts the UK's 60% reduction target, which would mean reducing the current annual CO2 emissions of more than 3.3m tonnes by between 1m and 2.5m tonnes per year.
The council has drawn up 17 principles of tackling climate change in Manchester, which will both help minimise future global climate change and plan for the local impact that climate change will bring.