Departments have reportedly been given two weeks to submit plans to transfer officials into regional hubs, with York one of a number of potential sites.
It follows reports in January that Prime Minister Boris Johnson intended to move the House of Lords permanently to the city and that the York Central site, next to York Station, had been identified as the ideal location for a purpose-built second chamber.
Yesterday Minister for the Cabinet Office Michael Gove confirmed parts of the Civil Service are to be moved out of central London to other areas of the UK.
Leader of York Council, Keith Aspden, said they would help support any civil service or House of Lords relocation to the city.
The Liberal Democrat councillor said: “Although proposals are at an early stage of discussion, this is welcome news.
“Worth £5.2bn to the UK economy, York is a key driver of regional growth with 9,000 businesses and 110,000 people employed across the city.
“The quality of the York Central site, located next to York station, is among the best in the North of England and is expected to attract hig quality occupiers.”
Mr Gove told the BBC the move would help to distribute “opportunity, jobs and investment fairly” across the country.
However proposals to move the House of Lords from the Palace of Westminster to York, he said, are a “matter for Parliament”.
Mr Gove said it was “vitally important that decision-makers are close to people”.
He added: “I think it is vitally important that the strength of the UK Government is displayed across the whole of the United Kingdom and that we distribute opportunity, jobs and investment fairly.
“We’ve already got civil servants in Scotland, who are working for the Department for International Development, and in Wales, working for the Department for Transport - but we can do more.
“It’s good for the Union, it’s good for equal opportunity, it is good for what we call levelling up.
“As far as the legislature goes, that is obviously a question for the House of Commons and the House of Lords - Government has to tread carefully.
“But my own view? I think that, if people were to see Parliament closer to different parts of the United Kingdom, then I don’t see there are any reasons why we can’t have more operations of the UK Parliament in Scotland, Wales and Northern Ireland.
“Our UK Parliament is a parliament for everyone in the United Kingdom, so making it more accessible, and we can discuss how, is a good thing.”
York Central MP Rachael Maskell said the York Central site, one of the biggest brownfield sites in Europe, presents a “huge opportunity” for a new base - whether for the House of Lords or a key Government department.
The East Coast Main Line upgrade will cut journey times, she said, and the city had numerous assets, historical, physical and social as well as already housing a Defra headquarters.
Ms Maskell said she would be writing again to the Cabinet Office to flag the “very exciting” opportunity for the city, saying there had to be an “economic step change” to create high-quality jobs, which the city “has been bereft of for so long”.
“The pandemic has demonstrated our need for more diversification in jobs that give more security - good public sector jobs would do that,” she added.
The Treasury is also reported to be looking at a new base on Teesside, creating a northern hub for policymakers, while other officials could move to the east and west Midlands,