The Institute of Public Policy Research (IPPR) said London's poorest children outperformed those in the north.
The report is being launched by the centre-left think tank in Sheffield.
The government said extra funds were being given to early years providers to help children from poorer backgrounds and close the attainment gap.
The report has also detailed a number of "tests" or benchmarks for the government's northern powerhouse scheme.
Research by the IPPR showed only 47% of children born in the poorest families in the north of England achieved a good level of early years development compared with 59% in London.
Its survey also found five northern city-regions combined had almost as many well-qualified individuals (3.6 million) as London (3.7 million) - but the IPPR forecasts demand for skilled workers in the North is set to increase.
The IPPR has proposed 11 benchmarks for Chancellor George Osborne's flagship policy to boost regional economies, including closing the "stark" gap in the development of children aged under five.
IPPR's director Ed Cox said: "We will never become a powerhouse economy when our children and young people have such a poor start in life.
"It will take a generation of investment - not only in new railways and motorways, but in the 'human capital' of the north - in education and training, starting with the youngest.
"If the Northern Powerhouse is to be successful, economic powers must be devolved to all corners of the North to allow businesses and policymakers to develop an economy that supports more productive, resilient and sustainable growth: jobs that pay well, prosperity that is shared, and opportunities for all."
The Department for Education said it was committed to ensuring every child, regardless of background, could fulfil their potential.
It said reforms had meant there were 250,000 more pupils in good or outstanding schools in the north since 2010.
A North-South divide is affecting children aged under five from poor families in the north of England, a new report by a think-tank has found.