The $1.3bn plant, on 1,700 acres in Blue Springs, near Tupelo, will create up to 2000 manufacturing jobs and produce an estimated 150,000 Highlander sport utility vehicles a year. Production is scheduled to begin in 2010.

Nissan already has a plant in Canton, Mississippi, employing 4000 people.

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Alabama’s governor Bob Riley had teamed up with Mississippi’s governor Haley Barbour to support Tupelo’s bid in exchange for Mississippi’s support for a steel mill project in Alabama. (Toyota has an engine plant in Alabama.) Some credit this alliance with swinging the vote in Mississippi’s favour.

For northern Mississippi, the project win is much-needed good news following an announcement by Sara Lee Corp that it would close its pork products plant 50 miles south of Tupelo and lay off 1200 workers. In recent years, Tupelo has lost much of its old furniture-making industry and many manufacturing jobs.

It is also a boon for neighbouring Alabama and Tennessee, which are within easy commuting distance of the site.

Mr Barbour said: “We in Mississippi, and especially north Mississippi, are excited to have been chosen by Toyota as its partner. Toyota is the world’s premier auto manufacturer and our state will be the best partner the company has.”

Toyota executive vice-president for manufacturing Gary Convis said: “Governor Barbour and the regional economic development team were very convincing and unrelenting in their efforts to showcase the area’s advantages.”