The factory will be the home of its new business, Legal & General Homes, which has been setup to build thousands of modular homes each year.
The company has signed a long-term lease on a 550,000 sq ft warehouse in Sherburn-in-Elmet, 15 miles east of Leeds.
Paul Stanworth, managing director of Legal & General Capital, said: “Sustainable, durable modern materials and proven technology will enable us to create high-quality homes meeting a wide range of housing needs and help solve the UK’s housing crisis.
“Modern modular housing in the UK has so far been restricted to the top end of the market: the scale of our Sherburn facility will enable many more people to benefit from new, environmentally-friendly construction techniques which have already become mainstream in Europe.”
Leader of Selby District Council, Cllr Mark Crane, praised the news. He said: “This is a real vote of confidence in the Selby district as a great place for business investment.
“Our transport links, the availability of affordable business space, and the quality of life here in Yorkshire all contribute to the growth potential of our area.
“This isn’t just about jobs, this is about housing too and we’re excited by the products that will be made at this site.
“We’ve been working with Legal & General for some time now, and we’ll continue to do so, to finalise plans for this major investment in the Selby district.”
Initially employing 400 to 500 local people, it expects to deliver its first houses from the factory in June.