It aims to turn a waterfront area into a working laboratory for a range of "smart" technology.
It is likely to feature fast wi-fi availability, millions of sensors, sustainable energy and autonomous cars.
Technology companies are touting their hardware and software to cities, as urban planners tackle issues such as congestion, pollution and overcrowding.
Public-private partnerships such as the one in Toronto could bring benefits, but cities needed to be sure about what they were getting out of the deal, said Robert Puentes, an urban planning expert from US think tank the Eno Centre for Transportation.
"Cities are trying everything they can to boost their economies and build infrastructure, but they have to realise that companies are not doing it for altruistic reasons - they are interested in generating profit for their shareholders," he said.