Nissan, the Japanese car maker, is to build a model at its Sunderland factory, supported by a £9.3m grant from the government. The vehicle, called the Invitation, is due to go into production from mid-2013.
The company said on Tuesday that the new venture would create 2,000 jobs – at the Sunderland site and in firms supplying the factory. The workforce at Sunderland will increase to 6,000, the highest on record.
Vince Cable, who is to attend the Geneva motor show for the official announcement, hailed the news as a "clear vote of confidence" in the country's manufacturing industry.
"It is fantastic news that Nissan will be building the new model in Sunderland. The investment is a boost for jobs at Nissan's plant as well as the wider supply chain", he said.
"This latest announcement highlights the UK's track record of attracting inward investment. Global vehicle manufacturers are beating a path to the UK's door."
Nissan is one of several car manufacturers to receive support from the government's Regional Growth Fund – which invests in projects that depend on the public sector and are supported by private investment. The £2.4bn fund has also made offers to Jaguar Land Rover, Lotus, Aston Martin, Getrag Ford and Pirelli Tyres.
John Cridland, Director General of lobbying organisation Confederation of British Industry, said:
“The Nissan Sunderland journey is a remarkable story demonstrating British manufacturing capabilities at their best – excellent training, a committed skilled workforce and brilliant determined leadership.”
“This is brilliant news for jobs in the north-east and a real boost for business investment in the UK."