The plant, near the western city of Oran, is due to start production in the first half of 2020, with a capacity of 63,500 vehicles per year, Peyman Kargar, Nissan's senior vice president and chairman of operations in Africa, Middle East and India, said at a signing ceremony in Algiers.

Nissan's partner, Hasnaoui Group, will hold a majority stake in the project, which is expected to create 1,800 jobs.

Algeria has banned car imports as part of an attempt to cut spending due to lower oil and gas earnings, the main source of state finances.

"We want to help diversify our economy," said Hasnaoui Group's owner Sofiane Hasnaoui.