Finnish satellite maker ICEYE will build its largest production base in Greece.
The plant will be able to make 150 satellites a year for export and create more than 230 high-skilled jobs, Prime Minister Kyriakos Mitsotakis said.
Mr. Mitsotakis announced the project as Greece's new state investment fund made its first deal: a 35 million-euro ($40 million) purchase of preferred shares in ICEYE.
The stake by the Hellenic Innovation and Infrastructure Fund is part of a 485 million-euro funding round.
Other investors include the sovereign wealth funds of Qatar, France, Poland and Finland, as well as BlackRock and General Catalyst.
"If this is not a change in the production model, I cannot imagine what is," Mr. Mitsotakis said. He called the deal proof to doubters that Greece's economy is shifting toward high-value industry.
ICEYE is a leader in small radar satellites, which can capture images at night and through cloud cover.
It already makes satellite subsystems in the Athens suburb of Neo Psychiko. The new plant will handle the full process of assembling, integrating and testing satellites.
The company also built Greece's first two radar satellites under a national microsatellite program.
Mr. Mitsotakis said the investment was strategic but should also deliver significant returns for Greek taxpayers.
He said it reflects a European Union push to build its own space industry.
The announcement came days after Greece opened a military space command and unveiled plans for 12 dedicated military satellites.
Mr. Mitsotakis also said Greece's first astronaut is expected to spend 15 days aboard the International Space Station next year.
ICEYE co-founder and CEO Rafal Modrzewski attended the meeting.