Led by Durham Wildlife Trust, the scheme will see a preservation plan drawn up for the River Skerne.
It will include initiatives to protect natural habitats as well as industrial and agricultural sites.
If successful, organisers say a further £2.6m from the Heritage Lottery Fund will be unlocked as well as £500,000 from other sources.
The project, called the Bright Water Landscape partnership, covers 200sq km (77sq miles) and focuses on the River Skerne from Hurworth Burn reservoir in East Durham to South Park in Darlington.
A project to conserve a North East river catchment area has been awarded £223,000 of Lottery funding.