Arts Council England is to conduct an immediate study into a proposal for a Royal Opera House in Manchester.

The new national theatre, proposed by the Royal Opera House and Manchester City Council, will become a permanent second home for The Royal Opera and The Royal Ballet in the North West from 2013. It will be converted from the city's existing Palace Theatre.

The evaluation will examine, in detail, the potential of the plans to expand opera and dance provision, develop new audiences and provide more training and skills development to the sector. The study will also look at the plans' possible impact on other cultural organisations, including those producing and touring this type of work in the north of England and across the country.

Arts Council chief executive Alan Davey said: "This is a bold idea and one of real national significance, which is why it is vital that we test it thoroughly.

"We must look at its potential impact on our arts ecology regionally and nationally, to ensure that it builds on the excellence of work already being produced and develops new audiences." The report is expected to be completed by the end of January 2009.

Secretary of state for culture Andy Burnham said:  "I welcome this plan. It has long been a personal priority for me to see national cultural organisations develop a presence outside London. So I'm really pleased to see the Royal Opera House's plan moving forward. But we must be sure that what is planned is right for the wider cultural scene in the North West, too. So an independent review, led by the Arts Council, will be a positive next step."

If successful, the Royal Opera House Manchester's programme will be developed in consultation with the Manchester International Festival, The Lowry theatre, the existing Manchester Opera House and music venue Bridgewater Hall. ROHM will work with partners including subsidised companies, international opera houses, commercial theatre producers and artists.

Tony Hall, chief executive of the Royal Opera House, said “This is a very exciting opportunity for us to create a wonderful programme of opera and ballet for the North West and deepen our relationship with the Manchester International Festival. It will also create an international beacon for innovation to enable young writers, composers, directors and visual artists to observe and experience the complex creative process of opera and ballet, working with world-class artists and leading academics from Manchester’s universities.”