The £355m plant will be built near Wolverhampton and becomes the fourth major Jaguar facility in the UK.
The Indian-owned brand currently builds its car range at two Midlands plants and Jaguar’s headquarters can be found at Gaydon, Warwickshire.
Jaguar and its sister brand Land Rover will invest £1.5 billion in its cars and engines every year for the next five years.
Jaguar recently revealed the new C-X16 sports car concept, a car expected to go into production in future. Designed to sit below the XK coupe in the Jaguar range, the C-X16 is seen by many as a successor to the iconic E-Type.
This month, a new Jaguar XF has been launched complete with new 2.2-litre diesel engine – described by Jaguar as the most efficient and greenest ever XF executive car from Jaguar.
The Big Cat will now design and build its own engines in the UK once the new plant is finished. Jaguar is expected to hire 750 people to work at the plant when it opens.
Jaguar currently builds the Jaguar XF executive saloon, Jaguar XK coupe and Jaguar XJ luxury saloon in the UK.
Land Rover builds its entire range in the UK including the Land Rover Freelander and the new Range Rover Evoque, both of which are built in the Halewood factory on Merseyside.
The new engine plant will build engines for Jaguar cars, but there is a possibility they will also be used in Land Rover cars as well.
Indian owners Tata Motors confirmed earlier in the year they would keep both Jaguar Midlands plants open after the sales success of the brand’s newest cars.