Preston is set to become the first authority in the north to pay staff a living wage.
And it will receive official living wage accreditation within the next few weeks.
Coun Matthew Brown, cabinet member for community engagement and inclusion, said: “This is fantastic news. Preston is leading the way.
“Our main priority is fighting inequality and poverty and this is the first step.
”When the Labour group first put this motion forward in 2008 they were told it was pie in the sky.
“Now we pay all our directly employed staff the living wage and we also ask our contractors to do the same with their employees.”
Coun Brown said that the council also encouraged other local businesses to commit to paying a living wage.
So far this has meant a pay increase for more than 200 people in Preston, many of them cleaning staff.
He said: “We’ve got some big companies on board, including Community Gateway and the university.”
He added that the contractors who are due to develop the Hill Street car park site had also agreed to provide the living wage to its employees.
Valerie Wise, chief executive of Preston Domestic Violence Services, said they signed up to the scheme in April.
She said: “When I heard about what the council was trying to do I knew it was the right thing and I put it to our management committee.
“Two of our staff, one of them a cleaner, were below the living wage and so we raised their pay accordingly.
“In the case of the cleaner it has made a big difference. She’s an invaluable member of the team but at that time she was earning £6.08 an hour.”
Earlier this week Preston was held up as an example during the Labour party conference in Manchester.
Rachel Reeves, Labour MP for Leeds West and Shadow Chief Secretary to the Treasury, announced that the city was among a further eight Labour-controlled local authorities on their way to becoming accredited Living Wage Employers.
Under the Living Wage model employers voluntarily opt in to paying the wage, which is a calculated according to the basic cost of living in the UK.
Next month will see the first annual week devoted to the living wage. It will run from November 4 to 10.