Cabinet member for resources, enterprise and economic development Graham Swift said the creation of the hub at the council-owned Springfield House was something he was "personally very excited about".
He is set to green-light a decision to award the £22,605 contract to digital consultancy and property management firm Creative Space Management at an executive cabinet meeting next week.
Coun Swift said the move would provide an opportunity for burgeoning technology companies to grow and network in Harrogate.
He said the hub would provide a modern work space where small companies and individuals involved in the digital economy, such as individual programmers and software writers, could work from while networking, sharing knowledge and growing their businesses.
While Harrogate does not currently have a "digital incubator", the establishment of one is considered critical for the district's Economic Growth Strategy, a long-term blueprint detailing future business growth in the region.
"I'm quite excited, this is the first attempt to act on behalf of our Economic Growth Strategy," he said.
He said seeing Leeds-based technology hubs showed the potential for a similar tech-minded space in Harrogate.
"Where I think we are weak and where we need external support is how to make it look a 'cool' and appealing place for people to work," Coun Swift said.
He said Creative Space Management's previous work in the sector made them a good choice to facilitate the creation of the space.
A council report on the matter supports that the company should be awarded the contract, which is worth a maximum of £22,605 based on a day rate cost of £685, without going to tender.
The firm's duties would include providing various support services including specifying refurbishment works, management of ongoing repairs and maintenance, settling letting agreements, general sales and marketing, and KPI reporting.
Additional council funds will be used for the fit-out of the office space.
Financing for the project will come from the £540,000 that HBC successfully secured from the Leeds City Region Business Rates Pool specifically to create a digital incubator hub.
Creative Space Management had previously been appointed by the council as a consultant on what the most appropriate operating model for a digital incubator hub was.
The council has therefore proposed to award the contract to the company without going to tender, with the report citing the firm was "already immersed in and has a thorough appreciation of the project" and therefore the most cost efficient.