Greater Manchester is to be given devolved powers over transport as part of the government's plans to create a northern powerhouse.

A new, directly elected mayor of Greater Manchester will exercise control over the transport budget, as well as having powers over housing, planning and other key areas.

The government stated that a multi-year settlement will be agreed at the next spending review, giving the mayor responsibility for franchised bus services (subject to consultation by Greater Manchester) and integrated smart ticketing across all local modes of transport.

Greater Manchester Combined Authority will continue to work with the rail industry to represent local interests and shape local station policy and development.

Communities secretary Eric Pickles said: "This landmark agreement shows how serious we are about moving powers out of Whitehall and reinforces the significant authority and finance already given to local communities."

Legislation to prepare these changes is now underway and the mayoral election could take place in 2017.