It was the first license issued under the country's new auto policy unveiled in January, aimed at making Malaysia a regional centre for energy efficient vehicles.
Trade Minister Mustapa Mohamad said Wednesday the 2 billion ringgit plant owned by a local company in northern Kedah state will have a production capacity of 100,000 vehicles when ready in 2018. He said 60% of the output will be exported to Southeast Asian countries.
Mustapa said more manufacturing licenses are expected to be issued this year to bolster the auto industry.
Officials said Great Wall may take a stake in the venture at a later stage.