The US-based company will set up a base at the Sunderland Council-owned Rainton North Business Park, in Houghton.

It is a joint venture with Japanese company Tachi-S, known as Tacle UK, and directors from the two companies flew in on Monday to sign the lease.

The council said it brings the total number of jobs announced for the city to 3,000 in just over three months.

Two weeks ago, Barclays announced it planned to create 250 jobs at Doxford International and in July Northern Rock announced the potential creation of up to 2,500 new jobs at Rainton Bridge South Business Park.

'Booming sector'

The council first met representatives from Lear Corporation in 2001 and has been in talks with the two companies for the past 18 months.

Council leader Bob Symonds said: "I'm delighted that one of the world's leading automotive component companies has chosen to locate in Sunderland and create 250 skilled jobs.

"It's a vote of confidence in the city's booming automotive sector and it brings the total number of new jobs announced for the city to 3,000 in the last three months."

The new factory is expected to open in 2006.

One NorthEast chairman Margaret Fay said: "One NorthEast has worked closely with Tacle (UK) Ltd and Sunderland City Council to help secure this very important new investment for the area, which brings the promise of valuable new automotive jobs to support Nissan's plant."