Electric-powered Mini cars are to be built in China, as well as in Oxford where most Minis are currently made.
BMW, the owner of the Mini brand, said it had agreed an outline deal with Chinese manufacturer Great Wall Motor.
Cars made under that partnership will be for the Chinese market.
The deal will not affect BMW's plan, announced last year, to assemble the first electric Minis in Oxford from 2019. Those cars will use electric motors made in Germany.
BMW and Great Wall Motor still have to work out the exact location of their production line and how much they will invest.
The Chinese governments has set a target that by 20% of cars sold should be electric or rechargeable-hybrid vehicles by 2025.
That is spurring all car makers to raise their investment in China.
BMW already has a joint venture with Brilliance Auto to build BMW-branded cars in China.
As well as two plants assembling cars, the joint venture has an engine plant which includes a battery factory.
Last year, BMW sold 560,000 cars in China - more than double the amount sold in its next two largest markets, the US and Germany, combined.