Ineos Automotive has chosen Bridgend for the production of its new 4x4 vehicle, according to industry reports.
Ford will close its plant in the town in 2020 with the loss of 1,700 jobs, but it is understood Ineos could initially create 200 posts, potentially rising to 500 in the long term.
The firm has been looking at Bridgend and an unknown location in Portugal.
Ineos plans to build a vehicle inspired by the Land Rover Defender, which went out of production in 2016.
However the company will face stiff competition from Jaguar Land Rover which has announced its own replacement for the Defender.
The Welsh and UK governments have been in talks with Ineos to encourage the company to start production in Bridgend.
It is understood the Welsh Government has committed millions of pounds to attract Ineos, while the UK government is believed to have also given assurances to the company as part of its industrial strategy.
The closure of Ford Bridgend is one of a series of concerns about the automotive industry in Wales with the closure of Schaeffler in Llanelli and job losses at Calsonic Kansei in the town.
The exact location is around the Ford site but not on it and the US car manufacturer is not linked with the move.
What is Ineos?
- Ineos has 171 manufacturing facilities in 24 countries
- It began in 1998 and has acquired businesses from companies including BP, ICI, Dow and BASF
- It has 19,000 workers, sells 60m tonnes of petrochemicals a year and has a turnover of $60bn (£48bn)
- The major shareholder is chairman Sir Jim Ratcliffe, ranked third in the Sunday Times rich list with a personal fortune estimated at more than £18bn
- It now sponsors the former Team Sky cycling team, which includes 2018 Tour de France winner Geraint Thomas