Meanwhile, company officials Tuesday said Toyota is investigating complaints about its hit hybrid Prius cars stalling.
The Japanese automaker said it will have capacity to build about 48,000 of the environmentally friendly Camry hybrids each year. It represents Toyota's first hybrid auto production in North America.
"Once the decision was reached to make a hybrid version of our best-selling vehicle — the Camry — the Georgetown plant was the natural choice," said Gary Convis, president of the plant.
Toyota said it plans a $10 million investment in the Georgetown plant, but said it expects capacity and employment to stay the same. The plant 12 miles north of Lexington employs about 7,000 workers and can build up to 500,000 vehicles per year.
Hybrid production will take place on the plant's existing lines, the automaker said. No new construction is planned. The $10 million will go mainly for equipment modifications and employee training.
Toyota said specific details about the Camry hybrid will be released later.
California and Canada also made a push to land Toyota's first North American hybrid production.
Kentucky Gov. Ernie Fletcher, who is on a trade mission to Japan, participated in Toyota's announcement by satellite.
"This is truly a great day for Kentucky," Fletcher said.
