The official announcement will be made later at the Geneva motor show.
The Japanese carmaker said that its £125m investment would create 2,000 jobs. The government is supporting the project with a £9.3m grant.
Nissan said that 400 of the new jobs would be in its Sunderland plant, and it estimates 1,600 jobs will be created in the supply chain.
“When we’ve looked at the numbers before, it’s usually for every one person employed in the facility there is four in the local supply base,” Trevor Mann, senior vice-president of manufacturing for Nissan Europe, told BBC News.
Production of the new compact car is scheduled to start from mid-2013.
Business Secretary Vince Cable told the BBC that the news was “a really great announcement”.
He added: “It is very positive, but you can’t see this in isolation, because the other big car companies have also made major commitments to the UK.
“Jaguar Land Rover, Ford, BMW Mini, are all putting in more money and bringing back supply chain.”
The additional investment in Nissan’s Sunderland facility will increase its workforce to 6,000, a record high for the factory.
The plant currently makes Nissan’s Qashqai, Juke and Note models, producing 480,000 vehicles in 2011