It said $850m will be spent on retooling its factory in Wayne where Ford plans to build Bronco and Ranger models.

In addition, Ford will create 130 jobs at its Romeo engine parts plant, it said in a statement.

In January, the US car giant said it would cancel a $1.6bn plant it had planned to build in Mexico.

US President Donald Trump, who put pressure on Ford over its planned Mexico investment, tweeted earlier on Tuesday:

"Big announcement by Ford today. Major investment to be made in three Michigan plants. Car companies coming back to US. JOBS! JOBS! JOBS!"

Ford's US investment announcement is largely in line with a previous agreement it reached with the United Auto Workers union.

'Very confident'

Mr Trump has at times promoted job announcements at the White House that had been previously planned or announced.

Last week he praised an investment decision by Charter Communications that the company had announced before he was elected.

Ford will spend $150m on its Romeo plant to boost its ability to make car parts, and $200m will be ploughed into a new data centre.

"We're optimistic that we'll continue to see good economic growth for the US in the near term," said Joe Hinrichs, president of the Americas at Ford. "We feel very confident about our plan and our products and about investing in Michigan and the US."

The $1.2bn total is in addition to $700m to expand Ford's plant at Flat Rock in Michigan, which it announced in January.

Ford said last week that it expected higher investments, as well as other spending, to drag on 2017 earnings.