Jaguar Land Rover (JLR) is to create up to 750 jobs at a new factory on a site near Wolverhampton, the firm says.
The luxury carmaker, owned by Indian firm Tata, is investing £355m to build low-emission engines at the i54 business park near the M54.
The 120-hectare site was confirmed as one of several new enterprise zones in July.
JLR chief executive Dr Ralf Speth said it was "truly exciting news" and "a major commitment for our company".
He added: "We expect the engine manufacturing facility to create up to 750 highly-skilled engineering and manufacturing posts at Jaguar Land Rover, along with hundreds more highly-skilled manufacturing jobs in the supply chain and the wider UK economy.
"As we invest £1.5 billion a year for the next five years in new product developments, expanding our engine range will help us realise the full global potential of both our Jaguar and Land Rover brands."
Last year JLR said it was reversing a decision to close one of its two West Midlands factories.
The group's headquarters is in Gaydon, Warwickshire, with Land Rovers produced in Solihull and Halewood, Merseyside and Jaguar models produced at Castle Bromwich, near Birmingham.
Last week, JLR unveiled three new concept cars at the Frankfurt Motor Show on the back of a period of strong sales fuelled, partly, by a growing number of orders from foreign markets, including China and India.
Speaking earlier on Monday, Bob Nason, the Unite union plant convenor at the Solihull Land Rover plant, said it was "great news".
"It's a far cry from where we were two years ago, worrying times two years ago as well.
"I think it's testament not only to the current workforce in the sacrifices they've made during those two years, but also I think testament to Tata's commitment to fulfilling a promise to create thousands of new jobs here in the UK.
"I think this will just be the start of that process."