Tata Steel, the world's seventh-largest steel maker, will spend £800 million ($1.3 billion) at its Welsh facilities over the next five years.
The move comes after the Indian steel maker said in December that it would mothball its Llanwern hot strip mill in Newport, South Wales, due to weak demand for steel and a poor economic outlook.
The £800-million investment at the Welsh facilities was today announced by the first minister of Wales, Carwyn Jones after meeting senior Tata Steel officials during his visit to India last week.
This investment will be used to improve production, product mix, quality and product range at their plants in Wales.
Tata Steel Europe (formerly known as Corus), the region's second largest steel producer after ArcelorMittal, has plants at Port Talbot and Shotton in Wales and employs 7,500 people in the country.
But a Tata Steel spokesperson said that the company has committed to invest £240 million on projects and could not be more specific about further investment at this stage.