A fully electric version of the Mini will be built at the Cowley plant in Oxford, BMW has said.
The carmaker said the model would go into production in 2019, with Oxford the main “production location” for the Mini three-door model.
However, the electric motor will be built in Germany before being shipped to Cowley for assembly.
BMW said it had “neither sought nor received” any reassurances from the UK on post-Brexit trading arrangements.
Last year, the government faced questions about the “support and assurances” given to Nissan before the company announced that new versions of its Qashqai and X-Trail would be made in the UK.
And there have been reports that Toyota agreed to invest in the UK after receiving a letter reassuring the Japanese carmaker over post-Brexit arrangements.
‘Vote of confidence’
About 360,000 Minis are made each year, with more than 60% of them built at Oxford. But BMW has built up an alternative manufacturing base in the Netherlands amid concerns about Britain’s suitability as an export hub after Brexit.
BMW has warned about the damage of Brexit uncertainty, and in May chief executive Harald Krueger said the company had to remain “flexible” about production facilities.
UK Business Secretary Greg Clark hailed BMW’s announcement as a “vote of confidence” in government plans to make Britain
“the go-to place in the world for the next generation of vehicles”.
On Monday, he set out plans to invest in development of battery technology in the UK.
Mr Clark met BMW’s head of sales and marketing, Ian Robertson, at the company’s headquarters in Munich in January and March this year. The two also held meetings at Westminster in March and June.
David Bailey, professor of industry at Aston University, said the true test of the global car industry’s desire to invest in the UK would come next year:
“I don’t think it [BMW’s decision] tells us much about Brexit and the form of trade barriers we may face in the future.
“The big decisions will be about future models [which would have redesigned bodies], both at Mini and at companies like Vauxhall when they announce their new models in the next couple of years.”
Read more: BBC News