CEO Ralf Speth confirmed the news at a press conference prior to the Geneva Motor Show and said the news showed “the company’s commitment to British jobs”.
The new factory is expected to start production in 2014 and was originally earmarked to employ 700 people.
The move sees JLR’s investment in the plant increase from around £355millon to £500million, and comes on the back of a record sales year for the buoyant British brands.
Sales were up 30 per cent year on year in 2012 as the company enjoyed its best ever global performance.
Star performer was the Range Rover Evoque, of which 108,607 found homes in 2012. Total JLR worldwide sales were around 350,000.
Around 80 per cent of the JLR vehicles made in the UK were exported, with China the biggest market. Sales there were up 71 per cent compared to 2011.