The Merry-Go-Round Playhouse and the Musical Theatre Festival Inc. signed an agreement Friday to join forces in creating the summerlong festival in the Auburn area that has been discussed for more than two years.

The idea is to establish a major destination festival that celebrates the diversity of musical theater as well as attract an audience large enough to have a positive impact on the economy of the Finger Lakes region, the organizations said in a press release.

Mary Tucker, president of the Merry-Go-Round Playhouse and William Dorr, president of the Musical Theatre Festival, signed the agreement. Michael Chamberlain has been appointed managing director for the festival and Ed Sayles, producing director at Merry-Go-Round Playhouse, will serve as producing artistic director. Sayles will continue in his role at the Merry-Go-Round Playhouse.

The organizations have been studying this concept for the past two years. The festival, which will produce musicals in five different venues, may potentially create more than 400 jobs and have an economic impact of nearly $30 million annually, according to research from the study.

Several sites, including the Auburn Public Theater and the restored Carriage House of the Cayuga Museum, have already been selected as venues. The Merry-Go-Round Playhouse will continue to present classic Broadway musicals in its 500-seat theater located at Emerson Park and a fourth 300- to 400-seat theater is currently under development with an eye on the Kalet Building in downtown Auburn.

Plans for the fifth and largest venue, which will be a new 600- to 800-seat theater, are still in the early stages, the organizations said.