Vauxhall has come to an agreement with the Government that will see the future of its Ellesmere Port car plant through production of a new electric van.
Sltellantis, which owns the firm, have been locked in talks with ministers for months and the BBC reports the deal has now been signed off.
It is believed the company is investing hundreds of millions of pounds in the Cheshire plant in a move that will safeguard around 1,000 jobs.
The future of the factory had been in grave doubt after Vauxhall announced it would be pulling the plug on Astra production at the site.
With van sales booming during the pandemic, due to growing home delivery sales, Stellantis has now decided to take the factory in a different direction.
It is not currently known how many electric vans the factory will make per year or when the switchover is likely to happen.
However, an announcement is expected to be made on the new venture as early as next week.
It is believed the Government has pledged around £100m to the project but it is not known how much it will be investing in the Ellesmere Port site.
Theo Leggett, the BBC’s business correspondent, said the decision to make vans at the plant made sense.
He said: ‘Making vans may not be particularly glamorous, but right now it makes a lot of sense.
‘While car sales have been badly affected by the pandemic, demand for smaller commercial vehicles has been soaring, due to the home delivery boom. Fleet operators are increasingly turning to low-emission options because of the tax advantages they provide.
‘For Carlos Tavares, the pragmatic and outspoken CEO of Stellantis, it offers a useful compromise.
‘He has been scathing about the UK government’s plans to outlaw the sale of new petrol and diesel cars from 2030 – accusing them of destroying his company’s business model in the UK.
‘Now there is a new business model – and with Mr Tavares having previously made it clear that future production in the UK would depend on what support the government could offer, it’s likely help from the taxpayer will be part of it.’