The North West Development Agency will cover the £3m cost of refurbishing warehouses for aerospace systems manufacturer Aircelle in Burnley in return for the creation of 150 jobs.
Aircelle has signed a 25-year at the NWDA-owned former Michelin site in Dundeed Road and will begin full scale manufacturing by the end of the year.
Morgan Ashurst won the contract to transform the warehouse into a manufacturing and office complex. The NWDA has plans to turn the former tyre factory site into an enterprise park as well as creating another estate on Princess Way.
Steven Broomhead, chief executive of the NWDA, said: "The NWDA bought the former Michelin site in order to encourage employment creation and regeneration in Burnley and I am delighted Aircelle has made this commitment to the town. We are keen to establish and grow the aerospace sector, which is vital in Lancashire, offering huge opportunities for local people and making a valuable contribution to the local and regional economy.
"Additionally, the confidence shown by Aircelle in Burnley will inspire other advanced manufacturers to base their businesses here, leading to redevelopment of the entire site."
Andrew White, managing director of Aircelle, said: "The development of the Michelin facility will allow us to expand our nacelles and thrust reverser systems manufacturing capability and significantly grow our business here in Burnley."