Damon Albarn has written and will star in a stage show about 16th Century alchemist, astrologer and spy John Dee.
A musical work based on Elizabeth I's medical and scientific adviser, Doctor Dee will have its premiere in July at the Manchester International Festival.
It will then be staged at the home of the English National Opera as part of London's Cultural Olympiad programme.
The Manchester festival will also feature the debut of Bjork's new show during a three-week residency.
Other original productions will be created for the event by immersive theatre company Punchdrunk, film-makers The Quay Brothers, comedian Victoria Wood and performance artist Marina Abramovic.
Manchester International Festival director Alex Poots said the event, which started in 2007 and takes place every two years, was "a home for major artists to realise their most ambitious projects".
Albarn's Chinese opera Monkey: Journey To The West was a highlight of the first Manchester International Festival four years ago and the Blur and Gorillaz singer will present his next production at the city's Palace Theatre.
Albarn did not appear in Monkey but will perform in Doctor Dee.
The show has been co-produced by the English National Opera and the London 2012 Festival and will be staged at the London Coliseum next year.
It will be directed by Rufus Norris, who staged Don Giovanni at the ENO last year and whose Broadway revival of Les Liaisons Dangereuses was nominated for five Tony Awards in 2008.
"It will be a big, spectacular show," Mr Poots said. "I know that Damon's passionate about it and he's already written some incredibly beautiful songs, some anthemic songs."
Bjork will launch the Manchester International Festival on 30 June with a show based on her new album Biophilia.
The project combines her interests in music, science and nature and is billed as a "multi-media project encompassing music, apps, internet, installations and live shows".
There will be an app for each song and the singer has invented a range of new instruments for the shows, including a 30-foot (nine-metre) pendulum that harnesses the earth's gravitational pull to create musical patterns.
She will perform six times over three weeks at the Campfield Market Hall.
Elsewhere, the Quay Brothers, celebrated for their dark, disjointed films and animations, will team up with Russian-born violinist Alina Ibragimova to stage chamber music in a promenade setting.
Punchdrunk will return after creating the acclaimed theatrical experience It Felt Like A Kiss with Damon Albarn at the last festival. Their new show, The Crash of the Elysium, will be the company's first for children.
Amadou and Mariam, a blind musical duo from Mali, will attempt to stage the world's first concert in total darkness, while comedian Johnny Vegas will present a new theatre show.
Victoria Wood is writing and directing That Day We Sang, about the 1920s Manchester Children's Choir, which will open at the Manchester Opera House.
Hollywood actor Willem Dafoe is to star in The Life and Death of Marina Abramovic alongside the Serbian-born performance artist. The production will feature music written and performed by Antony Hegarty from the Mercury-prize winning Antony and The Johnsons.
The festival will also involve rapper Snoop Dogg, singer Sinead O'Connor, artist John Gerrard, the Halle Orchestra and French composer Mark Andre.
Manchester City Council's executive member for culture and leisure, Councillor Mike Amesbury, said the festival "makes a massive contribution to the cultural offering of our great city and has helped establish us on the world stage as a leading artistic powerhouse".