David Kerfoot said it was "imperative" leaders do not delay in submitting their plans to Ministers for up to £2.4bn in investment to the region and a host of powers for a new elected metro mayor.
In a letter seen by The Yorkshire Post, the chairman of the North Yorkshire Local Enterprise Partnership said the county was running the risk of losing out as the Government has "limited capacity".
He said that if progress wasn't made soon "we will become back of the queue, behind other regions which have been more productive".
It comes as leaders wait for clarity from Ministers on whether North Yorkshire devolution or the local government reorganisation linked to it are still going ahead.
The Government said in July that for funding and powers to be transferred from Whitehall, the current two-tier system of local government would have to be replaced with unitary authorities.
A bitter row has sin.e ensued, with county council leaders proposing just one authority for the whole county and district leaders pushing for two councils either side of the A1.
It emerged earlier this month that the whole process may be in jeopardy because the Government did not have the capacity to drive it through while dealing with the pandemic and Brexit.
A spokesman for Robert Jenrick's Ministry of Housing, Communities and Local Government said it was aware that councils in North Yorkshire are developing proposals for unitary local government.
He added: "We are considering their requests for a formal invitation to submit these.”
In his letter to leaders, Mr Kerfoot warns that devolution should not be "put on the back burner while the issue of local government is sorted out.
If no progress is made, he warned, North Yorkshire will lose "first move advantage" and "get a poorer deal and reduced investment". If the issue is allowed to slip out of the current Parliamentary period its importance to Ministers will be reduced, he said.
He wrote: "Devolution was the driver behind government insisting on Local Government Reorganisation and we should not allow devolution to be put on the back burner whilst this politically charged issue is sorted.
"As a region we must come together and submit our proposals to government, making a clear statement that we are unified in our ambitions and committed to ensuring York and North Yorkshire recovers from Covid-19 as a region that is fairer, stronger and greener.
"We recognise the need for local government reorganisation, however the region needs to be unified and clear that this cannot be at the expense of devolution, nor can it be used as an excuse to delay our agreed devolution proposal."
He called for the devolution proposal to be submitted immediately to government, accompanied by a letter of support from civic and business leaders, making it clear that it needs to progress independent of the local government shake-up.
And he called for district, county and City of York leaders to work together to "ensure the change is a positive step towards a shared vision".
He said it was important that "this does not become a divisive process that creates long-term damage to the delivery of public services to all of our communities".