Described as 'the first stage of the freeport', which is expected to attract billions of pounds' worth of investment to the region, the site-specific agreement sets out arrangements for the tax site - one of nine approved approved through the bid.
'In order to get the freeport established, we need to get these tax sites through Parliament,' Mark Pembleton, Portsmouth City Council’s economic growth manager, said at Tuesday's cabinet meeting. 'What the government wants is to have these signed up to by each of the site owners with the councils for those relevant areas and Solent Freeport Consortium.'
He said these were 'absolutely essential' due to the large geographic coverage of the freeport and were required to be eligible for tax site designation.
However, the council's finance director Chris Ward has warned the agreement, which puts 'onerous' conditions on the council, is 'likely to limit the type of tenant we can attract to Dunsbury Park'.
A cabinet report says the agreement 'does complicate matters in creating significant levels of uncertainty in governance, financial and market impact and legal obligations', but adds: 'This may well be an acceptable sacrifice given the wider benefits of freeport status across the region.'
Formal tax status for the business park could be awarded by the government next month before the early April deadline for the submission of a full business case.
The city council has commissioned support from Colliers to help carry out an assessment for this, while advice has also been provided by KPMG and Paris Smith Solicitors through Solent Freeport.
'I don't think it's possible to overestimate the importance of this,' cabinet member for city development, Hugh Mason, said. 'We have long been at the forefront of a large number of industries, especially high tech industries.
'The type of benefits which we see here will attract advanced industry to come to our area. This is probably the most important thing we're doing today.'
Mr Pembleton said 53,000 jobs were expected to be created over 25 years and that it was forecast to bring between £1.5bn and £2.2bn in economic benefits to the region.
However, Paul Gilmour, criminal justice and policing lecturer at the University of Portsmouth, previously warned freeports have the potential to be used as tax havens for criminals.
'Freeports can be great for the local economy and great for employment but on the flipside they can allow companies to operate in secrecy,' he said. ‘There is a risk criminals can use them to launder money and evade tax. That is something the government needs to be mindful of.’