The order was signed on Monday by the Minister of State for Housing, Communities and Local Government, Simon Clarke MP.
The deal, worth £900m over 30 years for South Yorkshire, was initially signed in principle by all four South Yorkshire leaders in 2015.
But now the five-year stand-off has been broken, which includes a compromise which means both Barnsley and Doncaster councils could leave to join a Yorkshire-wide deal in the future.
A public consultation carried out in the spring found that people in South Yorkshire overwhelmingly supported devolution. with almost 90 per cent of 675 respondents backing the principle of devolution of further powers from Westminster.
Sheffield City Region Mayor Dan Jarvis, who is also the MP for Barnsley Central, said: “The landmark devolution deal has been signed into law this is a great occasion for South Yorkshire because millions of pounds in additional funding and new powers are available to support jobs and businesses, unlock opportunities for our people and deliver better public services.
“Devolution will open up our local knowledge and networks, bring power closer to the people, and help us reshape our economy and society in a way which reflects our values and priorities.
“I am determined to create a stronger, greener and fairer South Yorkshire and and this is just the start of our journey.
“The journey to reach this point has been long and difficult. I firmly believe it is worthwhile, as it provides leaders the opportunity to transform our region.”
The devolution deal will bring benefits including control of a new, flexible single pot of funding for economic growth, which incorporates an additional £30m annual allocation over the next 30 years.
It also secures devolved transport powers and funding, full devolution of the adult education budget of around £35m a year for colleges and training providers, increased planning capacity and powers to deliver housing and economic growth and greater control over how and where funds are directed.
Barnsley Council leader Sir Steve Houghton told the Chronicle: “This is good news for Barnsley and the South Yorkshire region, and an important step towards a wider Yorkshire devolution deal for the borough.
“The South Yorkshire devolution deal will bring significant opportunities and much-needed investment, supporting our social and economic recovery from the coronavirus pandemic.
“This deal is exactly the same financial deal as originally proposed, however this will now be shared between the four South Yorkshire councils instead of the nine that were originally envisaged.
“However long our involvement lasts in the South Yorkshire deal, it allows us to access our share of £30m per year.”