Design is at the forefront to achieve climate-neutral cities in Europe, a green and resilient transition of cities—as living places and as main stages for change—is on the agenda. Circular economy offers pathways to innovate creative design sectors that are active in this transition and are crucial for the cultural change and social inclusion needed. In a multidisciplinary approach the Innovation Alliance Circular Design (CiD) addresses the gap in skills and knowledge, in the sectors of architecture, urban design, product/service design, offering a radically new model on how to link design to circularity and urban transformation. It contributes to the New European Bauhaus’ aim for merging creativity, arts, and technology for the Green Deal. CiD rethinks design for a circular economy, orients multidisciplinary collaboration towards carbon-neutral cities, and focuses on bio-based innovation for the built environment—using bio-materials from other sectors, creating regional circular systems in renewable materials, and installing buildings as bio-machines. Green, digital, resilience and entrepreneurial skills in Circular Design are developed through an Innovation Ecosystem that brings together relevant actors from HEIs and VET with the broader socio-economic environment (RTO, municipalities, civil society and businesses). The targeted evolution of the Alliance’s results, their dissemination and sustainability beyond the project is supported through the involvement of Europe-wide organisations in architectural practice, society, and culture. The Alliance develops innovation in Circular Design education by fostering entrepreneurship in academia, with an accelerator and continuing education programmes to upskill in emerging labour market profiles and enabling the creation of green start-ups. This Circular Design Innovation Ecosystem will boost the turn towards a circular construction and design economy.