Porsche will assembly the new Panamera sports coupe at its Leipzig plant, creating around 100 new jobs, according to dpa-AFX news.

An official announcement will be made later today by Porsche boss Wendelin Wiedeking.

The body-in-white will be produced at Volkswagen's Hannover plant, securing around 500 jobs there.

This will be the first major collaboration between Volkswagen and Porsche since Porsche became the largest shareholder in the VW Group.

The two companies already collaborate on the production of the Porsche Cayenne. While final assembly of the Cayenne is done at Leipzig, the body is built at Volkswagen's plant in Bratislava, Slovakia. Bratislava supplies these complete with engines, axles and wheels.

Engines for the Panamera will be produced at Porsche's engine plant in Stuttgart.

The Panamera is due to go on sale in 2009.