The British government is to invest up to £180 million (€264 million) in an investment partnership for the development of Bombardier's C Series and the building of key components at its Belfast plant.
The British and Canadian governments are to make available some $700 million for development of the new passenger jet aircraft.
The investment decision will underpin or create a total of 1,700 manufacturing and engineering jobs at the company plant where wings, engine pods and tailfin components will be developed and built.
Bombardier said the expected $2.1 billion cost to develop the C Series will be shared between its suppliers and partner governments.
The C Series has been years in the planning, has yet to attract sales or an engine manufacturer. But management, government and unions are confident that the go-ahead will be given thus underpinning plane-making in Belfast for at least the next 20 years.
Te news follows three years of bad news for the company including layoffs and industrial relations problems.
The Letter of Intent, signed yesterday by the company and the British government, is the first step leading to a formal agreement which will take effect if the company board decides, as expected, to launch the aircraft.
The C Series is a 110-130-seater aircraft which Bombardier believes will meet market needs mainly in the North American market.
Michael Ryan, vice president and general manager of Bombardier, Belfast said: "If the C Series family of aircraft is launched, it would help the research and development of key technologies and capabilities over the next 15 to 20 years that would ensure our Belfast operation remains at the leading edge of aircraft design and manufacture."
He said the contribution from the British government, which follows lobbying from Ulster Unionist and DUP representatives in East Belfast, would help to "create or sustain many hundreds of jobs not just in Northern Ireland but throughout our 800-company supply chain in Britain as well as both parts of Ireland.
A company representative told The Irish Times last night that, although not formally linked with the development of the new Airbus A380, Britain and Ireland were earning a reputation for the development and manufacture of wings and fuselage components which was world-renowned.
Sir Reg Empey, the former economy minister in the suspended executive, said the announcement was the best manufacturing news for Belfast in many years.
"We are very pleased having been working on this project for years. We went to lobby Tony Blair about it earlier this year, and David Trimble met Gordon Brown in February." He said the design and manufacture of wings was "all-important".
"It is very, very significant," he said.
"This will have a major impact for many years. There may well be a need for more engineers as well as other jobs. Overall this will have a major impact," he said.
Peter Robinson, the DUP MP for East Belfast, congratulated the company and said it would be a major boost to East Belfast and Northern Ireland, "creating and securing as it does 1,700 jobs".
He said the investment "provides long-term security for the company", and added he was grateful for the work of the Prime Minister, the Chancellor of the Exchequer, and particularly the new Secretary of State for Northern Ireland, Peter Hain, all of whom he and the Rev Ian Paisley had had meetings with "right up to the eleventh hour seeking their intervention".
Mr Hain said the announcement represents a significant opportunity for the continued development of the aerospace industry within Northern Ireland. "The work packages we have secured for Bombardier in Belfast will see the company return to the highly-specialised production of aircraft wings and will help cement the UK's position as a centre of excellence for wing design and development."
He forecast that the project would generate new technologies and employment opportunities, making a "huge contribution to the future social and economic well-being of Northern Ireland."
