Last week, Isle of Wight Council voted against plans to form a combined authority for the Solent area. However, the council’s executive overturned this decision at a meeting on Monday.
Portsmouth City Council and Southampton City Council had already backed the plan.
The councils will now submit a request to the secretary of state for communities and local government to establish the Solent Mayoral Combined Authority (SMCA).
The devolution deal, which would see the region adopt an elected mayor, would see the allocation of £900 million in government grants to invest over the next 30 years in areas including transport, infrastructure and housing.
According to the plan, it would include the creation of a single spatial plan for the area "giving a consistent approach across the combined authority area for planning things like new transport links and new housing, leisure and business developments".
The deal would include a housing target but each of the three local authorities would continue to have their own local plans.
Isle of Wight Council leader Jonathan Bacon said: "This decision will mean the Isle of Wight Council can stay at the table as these discussions progress, with the involvement of the secretary of state.
"The council will still retain the option of not joining the combined authority if suitable terms cannot be agreed or the expected devolution deal, including an expected commitment for £900 million investment funds over 30 years, is not secured with the government - both will need the further and final agreement of the council".