The company plans to build a huge silicon-chip plant on a green-field site on the outskirts of the South Wales town.
Eventually, around 4,000 people will be employed, manufacturing semi- conductors for the computer and allied industries. Hundreds of spin-off jobs in the supply and service trades are also envisaged.
Details of the deal have yet to be revealed. Substantial Welsh Office and Welsh Development Agency (WDA) grants helped the Koreans to choose Wales in preference to Scotland and the North-east.
WDA officials spent days in negotiations with the company before securing what is being described as the largest-ever foreign investment in Europe.
Upgrading of the M4 motorway and the opening in a few weeks' time of a second road bridge across the Severn estuary, some 15 miles east of Newport, were other factors which helped to secure the deal.
Officially, the Welsh Office is saying nothing until Monday when the Secretary of State, William Hague, is likely to join in the announcement.
Wales's M4 corridor has attracted a number of significant investors over the past decade, but the Lucky Goldstar coup dwarfs all others and will be particularly welcomed in an area that has so far received a smaller share of foreign investment than locations further west.
The site, in the Celtic Lakes area, is adjacent to an advanced technology centre set up jointly by Imperial College, London, the Welsh Development Agency and local authorities. The venture was intended to attract high- tech investments - and the pounds 1bn-plus that Lucky Goldstar is believed to be proposing represents a handsome dividend.
The Department of Trade and Industry declined to comment last night. "We are not aware that the company has yet made any announcement," a spokeswoman said.
Harry Jones, leader of Newport County Borough Council, "If it all comes true, I'll be jumping for joy on Monday."
Seventeen Korean manufacturers operate plants in the UK - accounting for half of all Korean investments in Europe.
The leader to date is Samsung, which employs 3,000 at a factory near Newcastle upon Tyne where products ranging from television tubes to microwave ovens are manufactured. That investment of pounds 1.1bn attracted a government grant of pounds 58 m - a record which looks set to be overtaken.Reuse content