The Indy Racing League is set to stage a Grand Prix in Baltimore from 2011 onwards after city officials agreed a five-year, US$7.75 million deal with Baltimore Racing Development to fund the race.

The City of Baltimore Board of Estimates approved a plan that will see a total of US$7.75 million - US$5 million of which will come in loan contributions from the state of Maryland - for road improvements and specialist installations required for the street race. The remainder of the cost of improving the roads will come from the Maryland Department of Transportation. Prospective race organisers Baltimore Racing Development will share a percentage of event revenues with the city from the second year onwards and will pay an annual race fee of US$1.25 million for the next five years. BRD has also pledged to donate US$100,000 of its estimated annual US$14 million budget to local non-profit organisations.

With more than 100,000 people expected to attend the race, Baltimore's city council expects US$11 million to be generated in tax revenue, with 200 jobs created and US$250 million pumped into the local economy, and Mayor Stephanie Rawlings-Blake gave Indy Car a highly enthusiastic welcome. She said: "Our city will be home to one of the most exciting events in the world. This race will change the way the world sees Baltimore."

A statement from Baltimore Racing Development read: "Baltimore is a great fit for the Indy Racing League as it gives us a presence in the mid-Atlantic region. Baltimore Racing Development, as well as the city of Baltimore, has been very enthusiastic throughout this process and we are confident they will put on a first-rate event."

Indy Racing League is now expected to sign off on a licensing agreement within the next month. The Baltimore Grand Prix would then take place in August 2011, on a 2.4 mile circuit running around Inner Harbour and Camden Yards.