The town will be the host town for the second day of the legacy event, which has come about on the back of the success of the Grand Depart being held in Yorkshire this summer.
Scarborough Council’s cabinet agreed to foot the £135,000 cost of welcoming cyclists to the borough as it felt that the revenue it would generate would cancel out the initial expense.
The exact route of the inaugural race has not yet been revealed, but Scarborough leg is likely to begin in Foreshore Road before heading further into the borough and, possibly, beyond.
This would be Saturday May 2, with the following Monday being a Bank Holiday.
In the report, which went before cabinet members, Andy Skelton, the council’s director of service delivery, said: “In terms of benefits to the borough, it is difficult to quantify these in terms of a financial value. “Comparisons can be drawn with Armed Forces Day which delivers an estimated induced economic input to the area of £770,000.
“The key factors as suggested by Welcome to Yorkshire are up to 900,000 additional spectators over the three-day event and television coverage on terrestrial TV and across Europe.
“In addition, there is the opportunity to showcase the area as a destination and add to the growing enthusiasm and participation in the sport of cycling in the UK.
“These benefits are likely to exceed by some margin the cost of £135,000 to the borough council.”
Barrowcliff Councillor Bill Chatt told the meeting that: “This is a golden opportunity that can not be missed.
“We all saw the pictures of thousands and thousands of people watching the Tour de France come through Yorkshire and this is a chance for Scarborough to benefit from the legacy of the race.”
Deputy leader of the council, Councillor Derek Bastiman, also threw his weight behind the plan.
He said: “Pound for pound this will be one of the best decisions this council will ever make.”
However, the cabinet’s decision was not unanimous, with two members voting against the proposals.
Cllr Mike Cockerill said the council simply ‘cannot afford’ to spend the money when it is struggling to balance next year’s revenue budget.
His fellow cabinet member Cllr Michelle Donohue-Moncrieff, who described herself as a ‘long-time cycling fan’ warned that the race would be a ‘third tier event’ and not attract the big name riders that had taken part in the much more prestigious Tour de France.
She added: “People should not confuse what we will get with what we saw when the Tour was in Yorkshire.
“They are two very different type of events.”
Despite these concerns the council agreed to make the payment.
More details will be announced on Monday when the official launch of The Tour de Yorkshire is held in Leeds at Welcome To Yorkshire’s headquarters.
There the start and finish points of each of the stages will be revealed but the full routes will not be announced until January 21, which is 100 days before the race is due to start.
It is anticipated that Filey and The Wolds could see some action when the stage sets off into the county from Scarborough.