The new plant is expected to be built in Somerset, south-west England, while Jaguar Land Rover's UK factories are based near Birmingham, central England.
With an initial output of 40 gigawatt hours, Britain said the factory would provide almost half of the battery production needed by 2030.
The Faraday Institution has projected UK battery demand to reach over 100 GWh a year by that time.
"With this strategic investment, the Tata Group further strengthens its commitment to the UK," Tata Sons Chairman N Chandrasekaran said in the statement.
"Almost every car producing nation in the world (is) offering a lot of incentives in order to ensure that they preserve the integrity of their car industry," he said.
Persons:
Danish Siddiqui, Rishi Sunak's, Sunak, N Chandrasekaran, Mike Hawes, Andy Palmer, Aston Martin, Jeremy Hunt, wouldn't, Alistair Smout, Sarah Young, William James, Paul Sandle, Emma Rumney
Organizations:
Tata Motors, REUTERS, Danish, India's Tata Group, Rover, Tata, BBC, European Union, Nissan, Rover's, Faraday, Tata Group, EV, BBC Radio, Britain, Thomson
Locations:
Mumbai, India, Britain, Spain, Somerset, England, Birmingham, United States, Europe, China, EU