The company has been under court receivership since April, as its Indian parent, Mahindra & Mahindra, failed to secure a buyer for its 75 percent stake in the automaker.

The city government of Pyeongtaek, 70 kms south of Seoul, said it has signed a memorandum of understanding with the court-appointed manager of SsangYong and its labor union, regarding the sale of the site, which measures 850,000 square meters and is valued at 900 billion won ($786 million).

The plant was constructed in 1979.

The company will build a new factory in Pyeongtaek, and the city will provide administrative support in the process of construction and relocation, the city said.

"We will actively support SsangYong Motor to grow into a global company that contributes to the development of the local economy," Jung Jang-seon, mayor of Pyeongtaek, said.

Chung Yong-won, court-appointed administrator of SsangYong, said the new plant will focus on green and self-driving cars as a base for the company's long-term survival, reports Yonhap news agency.

SsangYong opened an auction for its majority stake on June 28.

Half of SsangYong Motor Company's workers will go on unpaid leave for two years beginning next month as part of self-help measures as the debt-ridden automaker is striving to speed up its sales process, the company said last month.

The automaker has been under court receivership since April as its parent, Mahindra & Mahindra (M&M) failed to attract an investor amid the prolonged pandemic and worsening financial status.