The current zone, which is managed by the North East Local Enterprise Partnership (LEP), covers two existing sites, one near Sunderland and the other along the banks of the River Tyne, covering a total of 117 hectares.
North East LEP chief executive Edward Twiddy told Regeneration and Renewal the Treasury has promised that the zone will be extended by a further 40 hectares providing a preferred investor can be found to occupy almost 40 hectares of the current zone in the next year.
He said the extra 40 hectares announced by Osborne has not yet been allocated and could cover more than one site.
If the LEP finds an interested firm, the new site would enjoy enhanced capital allowances, a form of tax relief that favours larger firms, and simplified planning rules.
Twiddy said: "The condition is we need to get a preferred bidder on our last remining large enterprise zone site on the north side of the Tyne in the next 12 months.
"To ensure enterprise zone land in the North East is replenished, the Treasury have said they will add another 40 hectares.
"We have got a lot of interest - it's a nice, big site on the waterfront with good infrastructure.
'We are fairly confident we can come to an arrangement."
Osborne made his announcement yesterday on a visit to a new 39,000 square metre distribution centre, built by Japanese logisitics firm Vantec Europe, on the enterprise zone site near Sunderland.
He said: "When I announced the decision to create the North East enterprise zone, I said that if it was a success, I would consider the case for expanding it.
"What I've seen with my own eyes today at Vantec shows that it is a success.
"I can confirm that the government will offer new tax breaks for an additional 40 hectare site.
"This is a further commitment by this government to enterprise in the North East, helping the private sector create sustainable jobs and lasting industry, replacing the unsustainable public borrowing of the past."
During his visit, Osborne met representatives from Vantec Europe, its parent company Hitachi Transport Systems, Sunderland City Council and the North East LEP.
LEP chairman Paul Woolston said: "This announcement is great news for the North East enterprise zone.
"The chancellor’s decision means that our enterprise zone is expanding by over a third and the value of our capital allowances for major investors by around 50 per cent."
Twiddy said about three-quarters of the enterprise zone offered enhanced capital allowances, while the remaining quarter offered reduced business rates.
The North East LEP covers Newcastle, Gateshead, Tyneside, Sunderland, Northumberland and County Durham.