The government is expected to provide £80m over the next five years to each of the new investment zones. The funds can be directed towards tax relief for businesses, training and infrastructure.
Officials said the Investment Zone plan is designed to accelerate research and development in the UK's "most budding industries".
The announcement was made by Chancellor Jeremy Hunt on Monday, but he is expected to unveil more details in tomorrow's Spring Statement.
The project is a scaled-down version of a plan first designed under former Prime Minister, Liz Truss, and has been framed under Hunt's ambitions to turn the UK into "the next Silicon Valley".
"True levelling up must be about local wealth creation and local decision-making to unblock obstacles to regeneration," Hunt said in a statement.
"From unleashing opportunity through new Investment Zones, to a new approach to accelerating R&D in city regions, we are delivering on our key priority to supercharge growth across the country."
The zones will be clustered around a university or other research institution and bring growth to areas which have traditionally underperformed economically. They are also expected to be focused on key sectors - technology, creative industries, life sciences, advanced manufacturing and the green sector.
Currently, eight areas in England have been shortlisted to receive these funds: the East Midlands, Greater Manchester, Liverpool, the North East, South Yorkshire, the Tees Valley, the West Midlands and West Yorkshire.
The government is also reported to be in discussions with the devolved administrations over how investment zones can be established in Scotland, Wales and Northern Ireland, where the final four locations could be established.
In addition to the investment zones, Hunt announced £100m of funds to be shared across Glasgow, Manchester and part of central England to support 26 "transformative" R&D projects.
The shortlist announcement was welcomed by both Conservative and Labour regional mayors.
Tracy Brabin, the Labour mayor of West Yorkshire, said: "West Yorkshire has a strong and thriving economy, and I'm pleased the government has recognised the strength of our innovation by choosing to work with us to deliver an investment zone.
"It will provide further opportunities for people across the region, as well as our world-leading higher educational facilities, building on our expertise in digital, technology, and health and life sciences."
Ben Houchen, Tory Tees Valley mayor, said he was "incredibly supportive of this proposal", in comments echoed by Tory West Midlands leader Andy Street and Labour mayor of South Yorkshire, Oliver Coppard.
Alex Taylor, head of Policy at the Institution of Engineering and Technology (IET), said: "We welcome the decision to create 12 new investment zones around the UK and to accelerate the growth of innovation clusters. These will provide significant support for the technology sector, which underpins our future economic success. It supports levelling up and will lead to the creation of high-skill, high-paid jobs.
"This is clearly needed – in our recent research, 49% of engineering employers who reported a digital skills gap in their workforce, said that it harms productivity and 35% said it harms innovation. "
The ambition to make the UK a "science superpower" is one of the central aims of Rishi Sunak's premiership, which led to the creation of a bespoke Department for Science, Innovation and Technology in the latest Cabinet reshuffle.
The investment zones announcement follows the news that the government would be spending £360m to support innovative technological projects, including a £250m investment in artificial intelligence (AI), quantum technology and engineering biology.
Edited on Wednesday, March 15th at 15:34 to add comment from The IET.
