First Minister Rhodri Morgan says there is "every expectation" that 400 jobs at a Swansea car components plant will be safe if its proposed sale proceeds.
The factory has faced an uncertain future in recent years
Canadian-based Linamar has signed a preliminary deal to buy the Visteon factory, off the city's Fabian Way.
There has been uncertainty for several years over the future of the plant, which was once owned by Ford.
Linamar said the deal offered "unique opportunities" to expand its business in the UK and Europe.
About 300 jobs have been lost or transferred from the factory, which makes axles and brake systems, in the last few years.
Linamar said it had signed a "memorandum of understanding" to buy the plant, subject to further negotiations.
Chief executive Linda Hasenfratz said: "The plant in Swansea offers us unique opportunities to service potential UK and other European customers."
Mr Morgan called the announcement "very positive" news for the workforce.
"We have been concerned about Visteon having a positive future for some years now since Ford divested itself of certain component manufacturing business," he said.
"Today's announcement is not the final sale of the Swansea axle plant to Linamar, but it is a very positive step forward.
"There is every expectation that the 400 jobs at the plant can be safeguarded, subject to finalising the sale.
"There is then the potential for Linamar to make fuller use of the facilities at the factory and possibly move forward with modernisation and investment."