Dulux paint maker AkzoNobel has announced plans to build a 12.6 million euro (£10.7 million) innovation hub near Gateshead, safeguarding 270 jobs.
The Dutch manufacturing giant said it will house more than 100 scientists and 170 technicians at a new research and development facility in Felling.
The company was eyeing locations in Singapore and the Netherlands before settling on the North East.
Conrad Keijzer, AkzoNobel's executive committee member, said the laboratory will develop protective coatings for heavy industry using simulation techniques that replicate extreme conditions.
"The work at the state-of-the-art lab will have an important impact on our most critical industries," he added.
"Top scientists and technical experts will be working here on future solutions that will offer essential protection to a great variety of products for our customers.
"They will reproduce conditions similar to those of the North Pole, the effects of acid erosion, or a fire on an oil rig."
The move comes after AkzoNobel revealed that it was opening a 110 million euro (£93.7 million) Dulux paint factory in Ashington, Northumberland.
Business Secretary Greg Clark said: "Having grown up in the North East, I am very aware of the strengths of the chemical sector in the region.
"AkzoNobel's significant investment in establishing a new technical innovation hub is further proof that Britain is open for business and underlines the growth we want to see and support in our local economies.
"As we develop our industrial strategy, we are determined to build on the diverse strengths of all of Britain's cities and regions."
The facility is expected to be up and running by the end of 2018.
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