Nissan is set to inject £125 million into building a new car model, which will create 2,000 employment opportunities at its UK factory.
The Japanese giant's Sunderland factory will build the vehicle from the middle of next year. A £9.3 million grant has been given to the company by the Government, to help with the project.
Vince Cable, the secretary for business, said the firm had given a "clear vote of confidence" in the UK's manufacturing industry by choosing the country as the new-build location.
It is important for motorists to have a well-made car, as it could stop them from claiming on theircar insurance , and could go some way to bringing premiums down.
The news means that Sunderland's Nissan workforce will rise to 6,000. New roles will be based at the site, as well as at companies which supply the plant.
Mr Cable will attend the Geneva Motor Show to hear the official announcement. He said: "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."
More than 480,000 vehicles were made by Nissan in Sunderland in 2011, which was a 14% increase on the year before.
This was also a new record for a UK car plant, and was attributed to how successful its Qashgai models were.
The Note and Juke models are also manufactured in Sunderland.
Copyright Press Association 2012