More than 50 towns that have been “overlooked and undervalued” will each receive £20 million to help address issues including half-empty high streets, rundown shopping centres and antisocial behaviour.
The scheme, backed by £1 billion ($1.22 billion) of investment, aims to put "funding in the hands of local people" to improve their communities, said Prime Minister Rishi Sunak.
In total, 55 towns, including seven in Scotland and four in Wales, will each receive an endowment-style fund to be spent over a decade.
The money must be used on local priorities such as reviving high streets, tackling antisocial behaviour, improving transport, boosting visitor numbers and growing the local economy.
The investment in towns such as Grimsby in Lincolnshire, Wrexham in Wales and Dumfries in Scotland comes on the eve of the Conservative Party conference in Manchester.
Mr Sunak said: "Towns are the place most of us call home and where most of us go to work.
"But politicians have always taken towns for granted and focused on cities.
"The result is the half-empty high streets, rundown shopping centres and antisocial behaviour that undermine many towns' prosperity and hold back people's opportunity – and without a new approach, these problems will only get worse.
"That changes today. Our Long-Term Plan for Towns puts funding in the hands of local people themselves to invest in line with their priorities, over the long-term. That is how we level up."
As part of the investment, the towns will each set up a board, bringing together community leaders, employers, local authorities and the local MP to help deliver a plan for consultation.
The Department for Levelling Up, Housing and Communities said the town boards would be able to use a range of regeneration powers while using the new funding.
Officials suggested more private-sector investment could be unlocked by auctioning empty high-street shops, reforming licensing rules on shops and restaurants, and supporting more housing in urban centres.
They said research showed communities want to see more green spaces created and market days established to enhance town centres, with policing hotspots implemented to make public spaces safer.
Levelling Up Secretary Michael Gove said: "We know that in our towns the values of hard work and solidarity, common sense and common purpose, endeavour and quiet patriotism have endured across generations.
"But for too long, too many of our great British towns have been overlooked and undervalued.
"We are putting this right through our Long-Term Plan for Towns backed by over £1 billion of levelling-up funding.
"This will empower communities in every part of the UK to take back control of their future, taking long-term decisions in the interests of local people.
"It will mean more jobs, more opportunities and a brighter future for our towns and the people who live and work in them."
Ministers have promised central government support for the town boards as they formulate their vision.
A Towns Taskforce, sitting in the Department for Levelling Up and reporting directly to the Prime Minister and Mr Gove, will help them develop their plans and advise on how best to take advantage of government policies, unlock private and philanthropic investment and work with communities.
The department said towns had been chosen according to the Levelling-Up Needs Index, taking into account such aspects as skills, pay, productivity and health, as well as the Index of Multiple Deprivation, to ensure funding goes directly to urban areas that will benefit most.
Mr Gove's department said the government would work with local councils and the devolved administrations to determine how towns in Scotland and Wales would benefit.
Officials said they "look forward" to working with a restored executive, with power-sharing currently collapsed in Stormont, to determine the approach for providing support to Northern Ireland's towns.
Angela Rayner, Labour's shadow levelling up secretary, said: "It takes a special kind of arrogance for a Prime Minister caught on tape boasting that he had swiped money from 'deprived urban areas' to now expect local people to be grateful for a promise to hand a tiny fraction of it back.
"Levelling-up announcements from this government amount to barely more than shiny headlines, chaos and delays.
"While the Tories force communities to go cap in hand to Whitehall begging for their own money back, the next Labour government will spread power, wealth and opportunity to all parts of our country."
The 55 towns benefitting from £20 million of funding are: Mansfield; Boston; Worksop; Skegness; Newark-on-Trent; Chesterfield; Clifton (Nottingham); Spalding; Kirkby-in-Ashfield; Clacton-on-Sea; Great Yarmouth; Eston; Jarrow; Washington; Blyth (Northumberland); Hartlepool; Spennymoor; Darwen; Chadderton; Heywood; Ashton-under-Lyne; Accrington; Leigh (Wigan); Farnworth; Nelson (Pendle); Kirkby; Burnley; Hastings; Bexhill-on-Sea; Ryde; Torquay; Smethwick; Darlaston; Bilston (Wolverhampton); Dudley; Grimsby; Castleford; Doncaster; Rotherham; Barnsley; Scunthorpe; Keighley; Dewsbury; Scarborough; Merthyr Tydfil; Cwmbran; Wrexham; Barry (Vale of Glamorgan); Greenock; Irvine; Kilmarnock; Coatbridge; Clydebank; Dumfries; and Elgin.