Japanese carmaker Nissan Motor will invest GBP127m at its Sunderland plant in UK to build a new hatchback model in the region.
Scheduled to go into production in 2014, the new medium hatchback is expected to create 225 jobs at the Sunderland plant and 900 more at component companies supplying Nissan in Britain.
The company said that the new investment follows the GBP125m it would spend to build its new Invitation compact vehicle in Sunderland from mid-2013.
The new Nissan hatchback will be made in 80,000 units per year and the Sunderland plant will add an extra shift.
According to the company, both production lines will work constantly and the total capacity is expected to rise to 550,000 units.
The investment at the Sunderland plant will be supported by a GBP8.2m from Britain's regional growth fund.
Nissan chief operating officer Toshiyuki Shiga said in Europe the company has achieved record growth in recent years by providing innovative, customer-focused models like Qashqai and Juke that are designed, developed and produced within the region.
"Nissan already produces more vehicles in Europe than any other Asian manufacturer and the model announced today will bring world-class quality and leading technology to our customers at the heart of the European C-segment," Shiga said.
"I would also like to thank the UK Government for its strong and sustained support which allows us to continue making significant, long-term investment in our Sunderland operation."