More than £100m is being spent on redeveloping Auckland Castle in Bishop Auckland and creating an open-air historical show called Kynren.
The Ernst & Young report, commissioned by the Auckland Castle Trust, suggests the projects will attract 430,000 visitors a year by 2020.
Kynren is due to open on 2 July.
Report author David Smith, said: "The potential economic output for the town, County Durham, and the wider North East is considerable.
"It is refreshing that this regeneration of a historically important market town will be based on predominantly private sector funding.
"The figures in the report are prudent. But we took the view of what could be the optimum outcome, and we said up to £20m a year for the expected total economic impact of all the planned projects.
"However, if they get the support from visitors, retailers and other businesses, then it could be far more."
David Ronn, managing director of the Auckland Castle Trust, said: "This is the first time we've had hard economic data on what the advantages will be.
"The vision since the trust took over Auckland Castle in 2012 has always been to create job and business opportunities for this area.
"The purpose of the independent report is to be clear about what those benefits will be, and to encourage support from those who have an interest in the county and the town."

For many, it was a historic and poignant moment - topped off when the president posted a note into the wall, as many worshippers do with prayers and supplications.
Others, however, were more interested in just what the note said - and the internet quickly flooded with speculation as to its exact content.
And while they are certainly not a true reflection of what was written on the note, they certainly raise a few smiles...

The man was killed in the incident in Fairfield Road, near to the junction of Lightwood Road, in Buxton at 17:45 GMT on Thursday.
Derbyshire Police said a 40-year-old man has been arrested on suspicion of causing death by careless or inconsiderate driving.
Officers said the man was due to be interviewed later on Friday.

At one point, its share price fell more than 10% on the Milan stock market. By mid-afternoon, it was still 9% down.
The bank said the ECB had given it until 3 October to draw up a plan for reducing non-performing loans.
Italian banks are saddled with €360bn (£300bn; $400bn) of bad debt, about a third of the eurozone's total.
Monte dei Paschi accounts for €46.9bn of that total.
In a draft decision sent to the bank by the ECB, it was told to reduce gross non-performing loans from €46.9bn to €32.6bn by 2018, representing a cut of 30% over the next three years.
Investor concern over the strength of the industry has hit Italian banking shares this year.
Several other Italian banks also suffered big share price falls on Monday.
In April, Italy's financial industry approved a government-backed plan to set up a rescue fund to help weaker banks.
The Atlante fund will be made up by private money, reportedly worth €5bn, and will buy up shares and bad debt in struggling banks.
The redevelopment of a County Durham town could generate £20m a year for the region's economy and create more than 400 jobs, a report says.
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Donald Trump has become the first sitting US president to visit the Western Wall, placing his hand on Judaism's holiest prayer site.
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A 79-year-old man has died after being hit by a lorry.
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Shares in Italy's third-biggest bank, Monte dei Paschi di Siena, have slumped after the European Central Bank told it to reduce its debt burden.