The facility is reportedly being built to construct Airbus' new A320 single-aisle aircraft.
NEW YORK (CNNMoney) -- European aircraft manufacturer Airbus is set to announce plans Monday to build a new facility in Alabama to produce commercial airliners.
Adam Buck, a spokesman for the mayor of Mobile's office in Alabama, said the $600 million facility will begin construction next year and will generate 1,000 permanent new jobs. It will be located on the site of a former Air Force base, where Airbus already has an engineering facility, Buck said.
A source told Fortune that the facility is being built to construct Airbus' new A320 single-aisle aircraft.
The site will be Airbus' first manufacturing plant in the western hemisphere, and represents a new challenge to industry rival Boeing (BA, Fortune 500) in the market for U.S. commercial jets. Some analysts believe the facility will also allow Airbus' parent company, EADS, to compete with Boeing for U.S. defense contracts.
An EADS spokeswoman referred questions to Airbus; an Airbus spokesman did not immediately respond to requests for comment. The company is expected to announce details about the project around 11:00 A.M. Eastern.
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