Lincoln's largest private employer has decided not to move 140 jobs abroad.
Engineering firm Siemens said it would invest £5m in its Ruston Works site, which is involved in the production of gas turbines.
The company, which employs about 1,500 people in the city, had intended to move the turbine packaging division but record orders had altered these plans.
It also confirmed work would start this year on its new Teal Park centre, with workers moving in next year.
The company currently has three sites in the city centre involved in the service, manufacturing and engineering and associated support for gas turbines.
Siemens managing director in Lincoln Nick Muntz said: "We have got a commitment to stay here, we have got a commitment to continue to build gas turbines here and we have a commitment to the city and employment here.
"And with the service move to Teal Park it is then time to say, 'What do we do with the site here for our new build programme?' and we want that to be world class so we have to invest."