English Fine Cottons, who are funding the initiative, expect more than 100 new jobs to be created as a result of the project which will service global and domestic markets.
£4.8 million of funding will be provided by English Fine Cottons, £2 million of which will be provided as a loan from the Greater Manchester Combined Authority with a further £1 million coming from the N Brown RGF6 Textile Growth Programme.
Orders have already been placed for manufacturing equipment ahead of the opening of business in 2016.
Andy Odgen, General Manager of English Fine Cotton’s parent company Culimeta Saveguard, believes the move will satisfy a strong demand for luxury goods in international markets.
He said: “We are extremely proud to have won this major government grant today to help us make real our dream of bringing cotton spinning back to where it belongs – the North West of England”
“There is a strong demand across the world for luxury good with the ‘Made in Britain’ stamp, and English Fine Cottons has the pedigree for the job.”
“Our roots are in technical textile manufacturing and we are in the perfect location – able to draw on a local workforce with the necessary skills and expertise.”
English Fine Cottons will base its new production facility in the refurbished Tower Mill in Tameside, Greater Manchester.
It will be the UK’s only cotton spinning business, spurring a revival in the trade more than 30 years after the last cotton mills closed.
Kieran Quinn, executive leader of Tameside Council said: “The return of cotton spinning to Tameside is a matter of huge historical significance.”
“For more than 100 years cotton was the key industry in the various towns making up the borough and indeed the North West of England.”
“The Park Road area of Dunkinfield, where Tower Mill is situated, is a corridor of former cotton mills and testament to the hold spinning once had on the region.”
The return of cotton spinning to Greater Manchester comes at a time of huge growth in the region as international businesses seek to take advantage of the world class resources and opportunities available in the area.