Birmingham City Council leader Sir Albert Bore has said the news that Greater Manchester will be granted wide-ranging powers under a metro-mayor should push leaders in the West Midlands to follow suit.
The Labour chief welcomed the news that Manchester is to be given greater funding and responsibility and said it offered encouragement for other city regions including Birmingham and the Black Country.
Earlier today, Chancellor George Osborne announced that Greater Manchester would granted greater powers to run its local economy, invest in skills and training, strategic planning, housing, policing and health services.
In return, the ten local authorities which make up Greater Manchester agreed to putting a regional elected mayor, or metro-mayor, in place in 2017.
Birmingham, Solihull and the four Black Country councils are close to agreeing a combined authority deal which would make a similar offer from government more likely.
Coun Bore said: "Today's announcement, of an agreement between the government and Greater Manchester Combined Authority, takes the debate on devolution and the cities a step further and should be welcomed by all of us who have campaigned for real devolution in England.
"Following the commitment from Ed Miliband on Friday, it demonstrates that the political parties are now ready to hand more funding and responsibility to city regions that can demonstrate strong and accountable governance and clear plans for the future, in terms of both growth and public service reform.
"This is why I, along with other local leaders, have been saying for some time now that we in the West Midlands need to get our act together and commit to establishing a combined authority in the year ahead.
"As we have said already, we are working very hard to bring this about and we hope to make an announcement before Christmas."
Sir Albert said he knew elected mayors were controversial, having been rejected in a Birmingham referendum two years ago, but warned that a metro-mayor would be a condition of greater devolution.
He said: "The Chancellor's announcement also takes things a step further by committing to legislate so that a mayor for Greater Manchester (and presumably other city regions) can be elected in 2017.
"We know this is a step that is controversial in all the core city regions, including Greater Manchester, but it appears that some of the proposed powers and funding will be dependent on the creation of this post, for example the powers of the Police and Crime Commissioner, strategic planning powers or the proposed Housing Investment Fund."