Land Rover, owned by Indian firm Tata Motors, has decided to go ahead with the £400m project, with the new model slated to be built at its Halewood plant.
The money comes from a separate fund that has been set up to help the auto industry survive the economic downturn without making as many redundancies as it might do otherwise.
This fund is set up by the government with the European Commission, and aims to get automotive companies to produce vehicles that have less of a negative impact on the environment.
The British Chamber of Commerce is calling on the government to do more to prop up the motor industry.
David Frost, director-general, said: "The vehicle industry will be central to driving our economy out of recession and employs large numbers of highly skilled individuals producing efficient cars for the global market of the future."
He is proposing the UK introduces a scheme established in Germany whereby car owners are given an incentive to scrap their old car and buy a new one, which has helped boost car sales in the country by 22% in February.