Three finalists will be chosen by a panel, with two runners-up receiving £250,000 each.
The competition had been launched as part of efforts to “restore pride in communities” with applicants encouraged to showcase their “unique stories”, the government has said.
The first title will be awarded for 2028 when the winning town will start a year-long programme of cultural celebrations.
Newcastle council said much of the borough’s history, heritage and culture was celebrated in 2023 during the year-long celebrations of the 850th anniversary of the town’s royal charter.
Newcastle-under-Lyme was awarded the overall prize at the Royal Horticultural Society’s Britain in Bloom contest, and the following year a statue of Queen Elizabeth II was unveiled in Queens Gardens.
Another long-term legacy was the creation of a Civic Pride Investment Fund to help bring communities closer together, the council stated.
Leader Simon Tagg said: “We already have award-winning jewels such as the Brampton Museum, Apedale Heritage Centre and the New Vic Theatre, and a culture of art and innovation which has been developed over centuries.”