Prime Minister David Cameron has approved a grant of £20 million to Nissan for manufacturing electric cars.
The grant is part of the range of financial support packages commissioned under the Labour government that are being reviewed by the new coalition.
Mr Cameron announced the approval to the Japanese carmaker's Sunderland plant during Question Time on Thursday.
Northern TUC regional secretary Kevin Rowan said: "This will bring an enormous and much-needed boost to the North East's economy, workers, and beyond.
"This kind of investment is a really important feature in the future economic growth of the region."
The funding will boost Nissan's production of the electric car Leaf from its Sunderland factory and safeguard hundreds of jobs.
The car giant said the Leaf - an acronym for Leading, Environmentally Friendly, Affordable, Family Car - will be produced from Sunderland by 2013.
It will be in the UK market from February 2011, coming from the company's production lines in Japan and the US.
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