Alabama, which seeks to emerge a major auto making hub in the south, will get a $1.6-billion joint venture plant by Japanese vehicle giants Toyota and Mazda that will eventually employ 4,000 people. Production is scheduled to start by 2021.
The new plant will be based in Huntsville, which is already a hub for the region's budding aerospace industry.
Thursday, the Huntsville City Council approved a $320 million local incentive package for the plant.
Toyota and Mazda will join Mercedes, Honda and Hyundai in operating factories in Alabama.
That announcement is expected to be made Wednesday afternoon in Alabama.
Alabama had already tied up with Tennessee as the fifth-largest producer of vehicles in the United States previous year, according to the Center for Automotive Research, an industry think tank in Ann Arbor, Michigan.
Alabama's total incentive package to Toyota and Mazda will top $700 million after local incentives are added to what the state offered to land the companies' new USA factory.
According to the centre, Alabama produced 9 per cent of the cars made in the country.
The plant is projected to employ about 4,000 workers and produce approximately 300,000 vehicles a year.
"Alabama was more equipped for this plant as it already has others". The new Huntsville plant will be just 14 miles (22 kilometers) from Toyota Motor Manufacturing of Alabama, which produces four-cylinder, V-6 and V-8 engines for several Toyota models.