The councils signed up to the scheme said it would "enable important decisions to be made locally on local priorities such as jobs and skills, housing, and the environment."
Deputy Prime Minister Angela Rayner said Devon and Torbay had "a wealth of untapped potential" and wanted devolution to ensure "those with skin in the game have their voices heard."
James McInnes, Conservative leader of Devon County Council, said the devolution would "make a real difference to people's lives in ways that matter."
David Thomas, Conservative leader of Torbay Council, stated: "It really does give us the opportunity to influence those policies that affect the lives of those that live in Torbay and Devon."
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