Teesside Airport is due to unveil a potentially lucrative tie-up with low fares airline Bmibaby, The Northern Echo can reveal.

The deal, expected to be announced later today, will see Bmibaby establish a base at the region's second biggest airport following months of discussions between the two sides.

Airport chiefs were last night reluctant to reveal the identity of the partner, but said their presence would firmly establish the airport as a key centre for growth in the low-cost travel market.

Managing director Hugh Lang said the deal, which will bring more cheap flights to the North-East, was one of the most significant developments in the history of Teesside Airport.

Bmibaby's parent, Bmi British Midland, the UK's second biggest airline, already operates three services a day to Heathrow from Teesside Airport.

Bmibaby has been searching for a third UK regional base since it became operational last year and invited a number of airports to tender for its services.

The company has already experienced huge growth at East Midlands and Cardiff airports and has been keen to expand further.

Bmibaby's involvement at Teesside is particularly timely following fellow budget operator easyJet's decision to begin regular European services from rival Newcastle airport.

It comes as a further boost to the profile of the airport which recently announced a deal with Liverpool John Lennon owner Peel Airports leading to £20m worth of investment over the next five years.

Leading budget airline Ryanair already also operates daily services to Dublin from Teesside and indicated this week that it could seek to add more destinations.

Aviation expert Gideon Ewers, managing editor of the Journal of the Airport Operators Association, said the link-up would have a positive knock-on effect for Teesside.

He said: "When a low-cost airline like Bmibaby moves into a new market it stimulates growth not just as a result of their presence but also for traditional airlines as more people think about flying from that location as a result.

"There are also things like increases in non-aeronautical income with more passengers meaning more people buying newspapers, drinks and the like."

A spokesman for Teesside airport said more details of the deal were being announced this morning.