The six borough councils of Blackburn with Darwen, Burnley, Hyndburn, Pendle, Ribble Valley and Rossendale and Lancashire County Council believe that the body will help to revive the area's former mill towns.
The company would place funding bids to attract inward investment and control regional development funds, as recommended by the government's sub-national economic review.
The exact powers of the company and the staff are yet to be confirmed. The board's members will include representatives from the private sector.
Pennine Lancashire local enterprise growth initiative director Steve Hoyle said the company will play a sub-regional planning role.
He noted: "We could produce a sub-regional spatial plan, which would knit local development frameworks together. This would build on joint planning decisions, such as a proposal for one strategic employment site."
Hoyle added that the company would make co-ordination easier because each council will not need to organise individual votes to make decisions.
Hyndburn Borough Council leader Peter Britcliffe said: "By working with neighbouring councils we should be able to secure funding that can be ploughed into all corners of Pennine Lancashire. Ownership of the development company lies with the councils themselves."