The UK government is providing grants worth £30 million for the project, which is expected to create 200 jobs by 2014.
Mistubishi's proposed plant will be for research purposes only, but the government said the project marked the first step towards production of turbines for the next generation of offshore wind farms, which could generate a possible 1500 new jobs. The UK wants to become a world leader in the offshore wind market.
Business Secretary Lord Mandelson said: "The UK is now well placed to manufacture the turbines needed for the next generation of offshore wind farms. We will continue to work with Mitsubishi to secure production in the UK."
Mitsubishi said it had to choose a site for the project, but was investigating a number of locations in north-east England.
Further strengthening the wind power market in this part of the country, the government also said it would provide an £18.5 million grant to the New and Renewable Energy Centre to develop an offshore wind test site at Blyth, off the coast of Northumberland.
