Japanese-based automaker Toyota has put an end to the rumours, with official word it will build a new assembly plant in Canada.

Toyota revealed the plan Thursday to build its seventh North American manufacturing facility near Woodstock, in southwestern Ontario.

The first entirely new auto factory to be built in Canada in 15 years, the facility is expected to produce 100,000 vehicles a year by the time its up and running in 2008.

In a videotaped message from Japan, Toyota president Katsuaki Watanabe said the company has strong ties to Canada.

"Twenty years ago, Toyota management made two profound decisions: We decided to make a sweeping commitment to manufacturing in North America, and we decided that Canada would be a core part of that commitment,'' he said.

"This expansion will strengthen our ties further with suppliers and with other partners across North America.''

The $800-million plant, to be built beside the busy Highway 401 corridor, will employ 1,300 people when it begins production in 2007.

It's expected the new factory will generate double that number of jobs in associated industries, as parts maker Magna International Inc. and several other companies have said they will either expand or build new supply operations.

The 400-hectare site for Toyota's new operation is double the size of the its existing facility just 40 kilometres away in Cambridge.

Opened in 1988, that $400-million factory has since grown -- with a second production line and engine assembly plant that collectively churn out 285,000 vehicles a year -- into a $3 billion investment.

Ontario is expected to pump about $70 million into the project, with Ottawa adding another $55 million.

"Locating this new plant here is a strong vote of confidence in our province,'' Ontario Economic Development Minister Joe Cordiano said.

"Toyota recognizes the value of our skilled and talented workforce. And we welcome Toyota.''

Echoing his provincial counterpart, federal Industry Minister David Emmerson said the announcement represents a coup for Ontario and Canada.

"New auto-assembly investments are coveted worldwide for the significant economic and technological benefits they generate,'' he said.

"This new Toyota plant will bring employment and training opportunities, new infrastructure, advances in environmental technology research and development, and spin-off benefits to related industries.''

In exchange for the provincial and federal aid packages, Toyota committed to a $39-million expansion of is Delta, B.C. wheel plant. The company reportedly also agreed to employ at least 5,000 people a year at its Woodstock plant, for a seven-year period starting in 2009.

In addition to building the popular Toyota Corolla and Matrix models, the Cambridge plant is the only facility outside of Japan to build vehicles for the company's luxury brand, Lexus.

The new factory is expected to build its compact RAV4 SUV as well as vehicles for the youth-oriented Scion brand now sold only in the U.S.