A new chemical plant is to be built on Teesside, creating 117 jobs as part of a massive investment by a US firm.
Teesside's chemical industry has been in decline
The UK government is also adding more than £16m to Huntsman Petrochemicals' pledge to invest £200m in the area.
Two existing chemical plants at the company's Wilton complex will be upgraded, safeguarding almost 750 jobs.
The new factory, which claims to be one of the largest facilities of its kind in the world, will produce low-density polyethylene used in packaging.
Construction work on the new plant will begin next year, with production due to start in 2007.
Trade and Industry Secretary Patricia Hewitt said: "This is great news for Teesside and shows that we are committed to high-value manufacturing.
"The investment will help the cluster to maintain its
position as a globally competitive petrochemicals site.
"The jobs will create opportunities not just for those employed at the plant, but for the rest of the area too."
Peter Huntsman, Huntsman president and chief executive said: "Teesside is one of the most important of our global locations and we are delighted that we will now enhance our presence here with this large, world class facility."
Alan Clarke, chief executive of regeneration agency One NorthEast, added: "The regional development agency worked hard to present the region's case for government support for Huntsman, emphasising its strategic role with the chemical cluster and its economic importance to the regional economy."
US-owned Huntsman manufactures products for a variety of global industries including plastics, automotive, footwear and textiles.
The company employs 15,000 people, has operations in 30 countries, and in 2003 generated revenues of more than £9bn.
The offer was made under a government's regional selective assistance programme.