The investment will fund the build of up to 1,200 new zero emission buses over the next three years, and includes the creation of a new manufacturing line and partnership with Northern Ireland-based bus manufacturer Wrightbus.

The £500m investment for Wrightbus – the largest in the company’s 78-year history – will also support an additional 2,000 jobs across the wider UK supply chain by 2026.

In a statement, Jean-Marc Gales, Wrightbus CEO, said: “The deal with Go-Ahead is hugely significant and represents a huge boost to the UK’s economy. It will support homegrown manufacturing, jobs and skills for the next three years and beyond. We’ve always been proud to support the UK’s supply chain and our Go-Ahead partnership will ensure even more money can be spent securing good green jobs.”

A training and apprenticeships fund has been established as part of the partnership, which will see the development of a learning academy for Go-Ahead and  employees, that will also see placements made available for students with Special Educational Needs and young people not in training or education.

The announcement comes ahead of the International Investment Summit, which will gather UK leaders, investors and businesses from across the world to discuss how the UK can deepen partnerships to drive investment and growth.

Louise Haigh, transport secretary, said: “The number one mission of this government is growing the economy. The half a billion pounds Go Ahead is announcing… shows the confidence industry has in investing in the UK.

“This announcement will see communities across the country benefit from brand new, state-of-the-art green buses – which will deliver cleaner air and better journeys.

“We’re creating the right conditions for businesses to flourish, so we can support jobs and accelerate towards decarbonising the transport sector.”

Go-Ahead and Wrightbus added that for every vehicle manufactured, 10 trees will be planted in the towns and cities where the buses are deployed.