The aim of this publication is to explain the institutional component and justify the institutional approach (theory, methods and practical rules) in modelling the spatial development of agglomerations. The institutional component and processes within Lviv’s local resettlement system are analysed, and the characteristics, analysis and assessment of the state of the suburban zone and the town centre are carried out. A detailed study and justification of the decision was carried out using the example of the Lviv agglomeration, the area of its potential creation and development. Poland’s experience is used in the practice of creating agglomerations within Ukraine.