The new version of the Qashqai will be built in Sunderland, car manufacturer Nissan has announced.
It said workers in Britain will design, engineer and build the new model and the £192m project will safeguard 6,000 jobs directly and indirectly.
The Sunderland plant has already been building the Qashqai model and is due to produce its millionth this month.
The design will be created in London, before being finalised in Cranfield, Bedfordshire.
The announcement was made by Nissan president and chief executive officer Carlos Ghosn with Prime Minister David Cameron.
Mr Ghosn said: "The UK has been a cornerstone of Nissan manufacturing since 1986, with the Sunderland plant setting important benchmarks for quality and efficiency in Europe and around the world.
"It's the home of the Qashqai, one of Nissan's biggest product successes.
"And as Nissan's leadership in sustainable transportation grows, the plant will become one of the pillars of our zero-emission manufacturing."
The announcement was welcomed by Mr Cameron and Business Secretary Vince Cable.
Mr Cameron said it was "fantastic news".
He said: "I have seen first hand the tremendous work at the Nissan Sunderland plant; this is a great day for them, the whole of the North East and for UK manufacturing too."
Of the 6,000 safeguarded jobs, 1,000 of them will be in Sunderland and 500 at the Nissan Technical Centre Europe in Cranfield.
In March last year, Nissan announced it was investing £420m in the Sunderland plant for the production of its electric car, the Leaf, from 2013.
The investment will also be in a stand-alone facility to make lithium-ion batteries for both Renault and Nissan vehicles from 2012.