Up to 150 jobs will be created with the car body work
Part of the MG Rover site at Longbridge is to become home to a firm that builds car body parts for Formula 1 teams.
The North Works factory will be used to produce lightweight automotive body shells, components and structures.
The Derbyshire-based Epm Technology group said it could eventually lead to 450 people working at the 100,000 sq ft site in Northfield, Birmingham.
Its customers include Renault, TVR, Marcos, Bentley, Aston Martin, Jaguar, Lotus, Land Rover and bus-maker Optare.
This will be the third Epm site. It has 130 workers between its headquarters in Draycott, Derbyshire, and a production centre in Coalville, Leicestershire.
The new Longbridge site will make lighter body parts to help vehicles go faster. Systems start as raw materials and finish the manufacturing process as painted, fully bonded structures ready for assembly.
Production in Birmingham should start in February, initially with 30 jobs, rising to 150 workers by the end of 2006, with expansion to follow.
Graham Mulholland, EPM group managing director, said this was one of the largest automotive composite projects to be undertaken by a private company
He said: "(This) will help to hasten a new dawn for Longbridge, generating new business, deploying the very latest technology and creating new jobs for the area."
Advantage West Midlands (AWM) bought 57 acres from MG Rover in 2003 - made up of the former South Works, North Works and a car park. Work on the first phase of Longbridge Technology Park started last week.
AWM chief executive John Edwards said: "This is absolutely fantastic news, not just for Northfield but for the region as a whole.
"Companies such as Epm Technology are exactly the sort we want to attract to this part of the region and we are delighted to have been able to agree the deal on the North Works."
Car production stopped at Longbridge with 6,000 jobs lost when the firm went into administration in April. Nanjing paid £60m for MG Rover in July, with hopes of 2,000 new jobs.