The federal, South Australian and Victorian governments have announced a $A275 million ($NZ353.6m) investment in Holden's vehicle-making operations in Australia.
In return, Holden has agreed to inject more than $1 billion into carmaking in Australia and to make two next-generation vehicles.
The partnership will see Holden making cars in Australia until at least 2022.
The federal government's contribution is $215 million, under the existing $5.4 billion so-called "New Car Plan for a Greener Future".
"This funding is not a hand-out - it is a strategic investment that will boost our economy, foster innovation, build new business opportunities and promote adoption of new fuel saving and safety technologies," Prime Minister Julia Gillard said in a statement.
Holden said two new types of vehicles would go into production in Elizabeth in South Australia.
It estimates $4 billion will be injected into the economy over the life of the new vehicle program.
As well, the federal and Victorian governments are going to provide $35 million to help other companies in the automotive supply chain.