The factory, which could generate 750 jobs, will construct blades and nacelles for offshore wind turbines and act as a base for installing them in the North Sea.
The company has signed a memorandum of understanding and its facility is expected to form part of a cluster of offshore wind factories.
Prime minister David Cameron hailed the move as evidence Britain remained an attractive place for foreign investment. He said: “Growth of the renewable energy sector isn’t just good for our environment, it’s good for our economy too, and with more renewable energy deployed under three years of this coalition government than under 13 years of the previous government, the UK is now the world’s biggest offshore wind market.”
Energy secretary Ed Davey said: “Offshore wind is a multi-billion pound opportunity for UK plc, which we must seize with both hands. Areva’s announcement is the latest sign that the UK is set to reap the economic benefits of being at the forefront of low carbon energy.”