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A deal which ensures 500 hi-tech jobs remain in Newport has been agreed.

German-owned Infineon Technologies is selling its site there to private firm Neptune 6 and it will be operated under the name Newport Wafer Fab Ltd.

The deal should be completed by the end of September and the two firms have struck a two-year supply agreement for semiconductor chips.

Economy Secretary Ken Skates welcomed the deal saying the closure of the site would have been a "major setback".

The value of the deal has not been revealed but it has received support from the Welsh Government and the bank, HSBC.

Steve Berry, the legal director of Neptune 6, said: "The Newport site, which comes with a skilled workforce of highly reliable and very experienced people, is extremely well placed to contribute to the rapidly emerging international compound semiconductor cluster of south Wales.

"The fab is very well equipped to act as a globally competitive chip foundry, and Newport Wafer Fab Ltd will be highly complementary to the existing semiconductor expertise in the region."

The news follows the announcement earlier this month of a £38m deal to develop firms in south Wales working on technology behind next generation robotics, 5G and driverless cars

The region is aiming to become Europe's major cluster for firms developing compound semiconductors.