In November, the automaker announced the Buick City Assembly Center would close in late 1999. GM tried to offset that shutdown with pledges to build a new engine plant near Flint.
Construction on the new plant is expected to begin later this month. The new engine plant is to replace the Flint V-8 Engine Plant, which GM expects to close by 2000.
The engine plant and the Buick City Assembly center have more than 6,000 hourly and salaried employees.
"Our decision to locate the new engine facility here is the result of the cooperative working relationship between management, union leadership and employees at the Flint V8 Engine Plant and the continuing progress they have made in quality and productivity," Homi Patel, vice president and general manager of manufacturing for GM Powertrain, said in a statement.
Cal Rapson, regional director of the United Auto Workers, said he was pleased that GM stayed with the decision to put the new plant in Flint.
"This new plant can become a showplace for union-management cooperation and the production of a quality product," Rapson said in a statement.
The announcement comes three weeks after GM settled two strikes at plants in Flint that virtually shut down the North American production lines of the world's largest automaker.
Some Wall Street analysts and industry pundits criticized the settlement, saying the strikes cost GM an estimated $2.6 billion in lost production but gained little in terms of improved long-term efficiency.
In April, the Flint City Council approved two measures that will let GM to pay no taxes for 12 years on $315 million of its investment in the $500 million plant, The Flint Journal reported at the time.
GM was founded in Flint in 1908 and thrived there for decades, employing about 75,000 people in the area during the 1970s. The No. 1 automaker has cut more than half of those jobs since the 1970s and today employs about 35,000 people at 18 plants and offices in the Flint area.
The Buick City complex, which includes operations other than the assembly plant, employs 9,500 people, down from about 26,300 at its peak in the 1980s.
Staffing in Flint has been a sensitive subject for GM, especially since the 1989 film Roger & Me by Flint native Michael Moore. The film was a darkly humorous look at the effects of thousands of layoffs and of Moore's efforts to interview Roger Smith, former GM chief executive officer.