Culture Secretary Oliver Dowden has asked for applications from places across the country who will vie to hold the honour in 2025.
And for the first time, groups of towns can join together and apply for the title to be awarded to their local area – widening the scope of the competition.
Mr Dowden has also announced that City of Culture will run in 2029 and beyond.
The Government will offer funding of up to £40,000 to up to six longlisted places to help develop their applications for 2025, and the winning city or town will be announced in Spring 2022.
Mr Dowden said: “UK City of Culture is a fantastic showcase of the huge impact culture has in towns and cities across the country. From Derry-Londonderry, to Hull and Coventry, previous winners have shown how the competition can deliver greater cultural participation, drive economic regeneration and boost local pride.
“I encourage towns and cities across the UK to put forward bids for 2025 and champion their local arts and culture scene. I’m also delighted to confirm the competition will run in future years, as a sign of our commitment to levelling up culture across the whole of the UK.”
For 2025, the Government says towns and cities “need to articulate a strong and unique vision for their future growth, celebrating local heritage and using culture to bring communities together, build a sense of place and inspire local pride”.
Bidders will also be asked to demonstrate how investment in culture and creativity will drive growth, how they will open up access to culture and to develop partnerships and celebrate links with places across the UK.
Applications for the title will be assessed by an independent panel chaired by TV producer and screenwriter Sir Phil Redmond, who will be joined by Claire McColgan, director of Culture Liverpool, as deputy chair.
The panel of 11 members will include representatives for Scotland, Wales, Northern Ireland and England. It will visit each of the shortlisted cities, to be announced later this year, before each city or town makes a final pitch.
Prospective bidders will be invited to join a two-day workshop in Coventry which will provide further detailed information and advice on the bidding process.