Councillors agreed a formal agreement be entered into with Scottish Enterprise to fund essential infrastructure work which will complement investment by the Council and the European Regional Development Fund which has awarded up to £861,000 towards the project.
As part of the agreement, Scottish Enterprise will contribute £490,000 to the £3.176 million Investment Park project.
It’s thought the new Investment Park could eventually secure up to around 650 manufacturing and engineering jobs as well as contributing to the physical regeneration of the area.
The joint Council and Scottish Enterprise project will build on the success of the flagship Energy Park Fife.
The project would give manufacturers and supply chain businesses who work in the energy sector the chance to locate beside each other and potentially attract larger business investment.
Councillors also agreed that a business case be submitted for the Scottish Government's Tax Incremental Financing (TIF) initiative.
If the business case is approved, a legal agreement with the Scottish Government will give the Council the potential to secure funding for further investment in essential infrastructure at the Energy Park Fife.
TIF allows local authorities the ability to retain additional non-domestic rates income which can be generated by unlocking regeneration and development within a defined area.
Depute council leader Lesley Laird, spokesperson for Economy and Planning said: "This is the next stage in progressing these important plans which will help grow the Fife economy and play a major role in regenerating one of Fife's most deprived areas. It is also a strong signal to the market that Fife is open for business and reinforces our aspiration of making Fife the best place to do business."