Ford Motor (F) and Chrysler Group are the biggest recipients of the incentives, the Michigan Economic Growth Authority said.
Ford will receive a 15-year credit worth $909 million, with nearly half that amount going toward opening plants and hiring workers, the agency said. Chrysler will receive a 20-year credit worth $1.3 billion to upgrade facilities and add additional shifts at its plants.
On Monday, Ford said it would create as many as 1,200 engineering and manufacturing jobs by spending $850 million to upgrade at least four Michigan plants through 2013, in anticipation of the agency's approval of the incentives.
The Dearborn, Mich.-based company reported earlier Tuesday that it earned $1.7 billion in the third quarter, marking its sixth consecutive profitable quarter.