A train company will create 30 new specialist engineering roles with the launch of a factory which will help power the railways.
The new jobs will be generated over the next three years as Vivarail sets up its new plant on the Spectrum Business Park, which stands on the site of Dawdon Colliery in Seaham.
The firm says it has been attracted to the region by its "highly-skilled labour pool "and is investing up to £100,000 in the plant.
The factory will assemble components to power refurbished trains previously run on the London Underground network.
It will join a growing number of rail engineering companies and suppliers operating in the region as it sees a resurgence in the industry.
The company's chief executive Adrian Shooter, a former chairman of Chiltern Railways, said the production facility, expected to be operational in January, will further strengthen the region’s rail industry and benefit its wider supply chain.
He said: “As Vivarail looked to expand and open a new site, the North East was a very attractive location for us, most notably because of its highly skilled pool of engineering and manufacturing workers.
“The region already has a strong rail industry and we want to tap into this and look to buy locally where we can.
"Plus, we also have the opportunity to expand further here, depending on the speed and scale of future orders.”
The firm has taken an 11,000 sq ft site on the the business park, supported by economic development organisation Business Durham, working on behalf of Durham County Council.
Vivarail was formed by Mr Shooter in 2013 to buy old D78 metro stock from the London Underground and transform the disused carriages into state of the art passenger trains for use as local commuter-type trains.
The company’s upcycled D-Trains retain the bodyshell and bogies of the original vehicles, while fitting them with modern engines and cutting-edge technology to create eco-friendly trains that have lower fuel consumption and low emissions.
Vivarail is based at a large site in Long Marston, near Stratford upon Avon, where it stores its stock of 226 carriages and can refurbish and refit the trains to specific client requirements.
Its new production facility in Seaham will be used to assemble the powerpacks and wiring looms needed to run the trains.
Peter Rippingale, inward investment manager at Business Durham, said: “Vivarail is a very forward-thinking, modern company, bringing with it a good number of specialised jobs and making the most of the talent we have in the region.
“By investing in County Durham and pledging to use regional suppliers where possible, Vivarail is expected to have a real impact on the rail industry and the economy.”
Councillor Carl Marshall, the county council's cabinet member for economic regeneration , said: “We’re delighted Vivarail has chosen to open a new site in Durham as part of its expansion, a decision which recognises the vast array of talent we have here in our county.
“This will not only provide a boost to the local economy but will also strengthen our rail industry even further and we hope it encourages others to consider Durham as a destination for their own businesses.”
Three different types of powerpack will be assembled at Vivarail’s new plant, including a pioneering battery-only system currently being developed with £640,000 grant funding awarded earlier this year by Innovate UK, the UK’s innovation agency.