Great City Attractions - the company behind the world's biggest observational wheel in Singapore - has clinched a deal to build a similar structure at Edinburgh's waterfront.
Forth Ports, the developer behind the 700 million regeneration of Leith Docks, has agreed to provide land for the development next to Ocean Terminal and the proposed tram stop.
Plans for the structure, which is expected to be 85 metres tall and labelled "Scotland's national wheel" are expected to be unveiled before Christmas.
City leaders believe that the plans could kickstart the redevelopment of the entire waterfront area.
Nigel Ward, head of global development at Great City Attractions, said: "We are preparing a planning application to be lodged before the end of this year and we have provisional agreements in place with all parties.
"This will be a world-class development for Edinburgh. It has been tagged as Scotland's national wheel and it will bring huge benefits to the area and to the city."
It is understood that the wheel could be operational by as early as 2013 if the planning process goes smoothly.
The agreement to use land outside Ocean Terminal - the site usually used by the Chinese State Circus and other events - clears a major stumbling block for the proposal.
Forth Ports is understood to be keen to see development take place as quickly as possible as bosses at the firm believe that the wheel could help attract other businesses and developers to the Leith Docks area.
Forth Ports was not willing to disclose details of the agreement it has struck with Great City Attractions. It is not known whether the company had to pay for the land or whether it was donated in return for a share of profits.
The city council has signed a memorandum of understanding, a more formal version of a gentleman's agreement, with Great City Attractions to bring a wheel to the city.
Councillor Tom Buchanan, the city's economic development leader, said: "It is in Great City Attractions' interest to come forward with this as quickly as possible. This will not cost the council any money as all the risk is with Great City Attractions and they will want to be raising revenue as quickly as possible.
"We want attractions at the waterfront that drives people to that area and I am very pleased to see that this is moving quickly.
"In other cities such as Belfast people discuss it and want to see it and it acts as a magnet for money in the area that it is in."