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A substantial number of jobs could be created at City of Derry airport as part of a £7m funding package, the deputy first minister has said.

About £2.5m will be used to attract new airlines, the remaining £4.5m is earmarked for the airport's infrastructure.

Mr McGuinness said the investment could see the arrival of "highly paid" jobs.

There have been concerns about the viability of the airport after Ryanair dropped a number of routes.

The future of the airport will also be on the agenda at a meeting later between Stormont ministers and the Secretary of State, James Brokenshire.

"We've effectively agreed a fund in the region of £7m - £2.5m for the air development route to ensure that we continue with the good work that goes on here and £4.5m for what we consider to be important infrastructure projects at the airport," Mr McGuinness said.

"Conceivably if it comes to pass, and we're very optimistic about that, will see new business generated at the airport but more importantly the very real prospect of a very substantial number of jobs created."

City of Derry Airport is owned by Derry City and Strabane Council.

The business is currently running at a loss of more than £2m a year and its chairman does not expect it to break even until 2021.

Foyle DUP MLA Gary Middleton welcomed the funding announcement as a "significant boost" to the local economy.

"Airports and good infrastructure are key factors in attracting business and providing better connectivity. Improving and investing in these areas is great news for the north-west.

"The package from the executive will help deliver economic prosperity to the north-west and I am delighted that the executive is committed to growing the Northern Ireland economy."

The Stormont funding package is to be made available immediately while negotiations are ongoing with a company interested in using the airport as a maintenance hub.

The deputy first minister said the company would be involved in the servicing and repairing of planes.

"The jobs that would be created would be high quality, highly paid jobs which, I'm sure, would be very welcome for the local area," he said.

"We are speaking to a company who is hugely interested and who feels that this airport offers them the best opportunity to develop their business, so it's very, very encouraging."

Mr McGuinness added that a regular service from Londonderry to London was "absolutely vital" and that he was very positive on the outcome of a public service obligation (PSO) application.