Burnley's £1.4m Regional Growth Fund cash, confirmed on Friday, will be used to create a 50,000 sq ft logistics park on the former Michelin site next to Aircelle's base.
The aim of the RGF bid by Aircelle, supported by Burnley Council, was to increase efficiency and capacity within the aerospace supply chain. Aerospace supply chains in the UK are coming under increased pressure as demand for civil aircraft from developing economies continues to rise.
Aircelle supplies nacelle systems – cover housings such as for engines – to Airbusm Bombardier and Rolls-Royce.
Burnley's Aerospace Supply Chain Logistics Park will work with Aircelle's supply chain to create a logistics plan that brings together and enhances small firms within its supply chain.
Alan Hood, managing director of Aircelle, said: "This is fantastic news for Aircelle and for Burnley.
"We have shared a vision with the council for the former Michelin site for some time. We have a strong long-term order book but need to strengthen and consolidate our supply chain, giving us the certainty we and our customers need and enabling those supply chain companies to grow.
"We have already had a number of businesses express a strong interest in moving onto the Park, in order to benefit from the increased capacity and capability, and seize the opportunity of the increase in demand for their services from the growing market in civil aviation and the emerging economies."
Cllr Julie Cooper, leader of Burnley Council, said: "I'm delighted the bid has been successful, which will see further investment in Burnley. The council worked closely with Aircelle to prepare the bid, which is further evidence of the success of the council's close working relationship with our local businesses.
"This project represents the very best in public-private partnerships. Aircelle led a very innovative bid, working alongside Burnley Council with support from the Homes & Communities Agency, the Lancashire Local Enterprise Partnership and Regenerate Pennine Lancashire. Delivery of this project over the next couple of years will lead to the creation of many new jobs for Burnley and make a real difference to the local economy."