Hyderabad, Sep 16 (IANS): India's biggest two-wheeler manufacturer Hero Motors Limited Tuesday signed an MoU with the Andhra Pradesh government for setting up its manufacturing plant in Chittoor district.

Rakesh Vashisht, a company representative and state government officials signed the Memorandum of Understanding (MoU) in the presence of Chief Minister N. Chandrababu Naidu.

The company official said it would be a state-of-art, ultra modern and energy efficient plant, which will have in phases an annual capacity of 1.8 million vehicles.

Hero will invest in the Rs.1,600-crore plant which will come up near Sri City Special Economic Zone in Chittoor district. He said ancillary units were expected to invest about Rs.1,500 crore.

The plant, which is expected to be completed in 18 months, will provide direct employment to 3,000 people.

The state cabinet in its meeting Monday had decided to allot 600 acres of land for the plant, which will be the sixth manufacturing plant of Hero Motors in the country and the first in south India.

This is the first big ticket investment in Andhra Pradesh after bifurcation of the state in June.