Toyota has confirmed that global production of its Auris replacement will take place at the car maker's Burnaston factory in Derbyshire.
Toyota will create 1500 jobs and invest 100 million to ensure Burnaston meets demand for the hybrid, petrol and diesel versions. The current Auris is made in the UK, Turkey and Japan.
Prime Minister David Cameron said: 'This major announcement from Toyota is fantastic news and a massive vote of confidence for UK manufacturing.
'Toyota's commitment to the UK shows the growing strength of the UK car industry it is our great British success story.'
Toyota's news follows Jaguar Land Rover announcing 1000 new jobs in Solihull, and a 750m new engine factory in Wolverhampton, which will create 750 jobs.
Toyota's European boss, Didier Leroy, said the Burnaston factory is 'among the finest in the world in terms of efficiency and environmental performance'.
More than 85% of Toyota's production in the UK is exported.