IBM and the Kenyan government are to open a tech research hub in Nairobi, in a joint attempt to help solve local issues such as traffic congestion.
The US firm already has 11 research outposts around the world.
It plans to have up to 50 researchers in the new centre within five years, attracting potential candidates from across the continent.
East Africa - especially Nairobi - has recently become an attractive destination for foreign hi-tech firms.
IBM already has operations in more than 20 African countries, but this will be its first research centre on the continent.
It is not clear how much the company will invest in the new lab, but globally, it spends about $6.5bn (£4.13bn) per year for research and development.
Kenya plans to contribute $2m (£1,275,000) over five years, with copyrights for resulting works being shared, according to information and communication permanent secretary Bitange Ndemo.
The initiative is aimed specifically at helping Kenya increase the use of technology in public sector areas.
"The research lab will be dealing with traffic congestion, which is a huge problem, as well as solving the clean water issue, and population density in cities," an IBM spokesman told the BBC.
According to IBM's 2011 Commuter Pain survey, roads in Nairobi are the fourth most congested in the world.
"With a growth rate expected to average 7% annually over the next 20 years, Africa is poised to become a leading source of innovation in a variety of industries," IBM said.