The first tier-1 supplier for the Volkswagen plant will be buying more 49 acres at the Enterprise South Industrial Park.
The purchase will be from the city and county, Steve Leach, city public works administrator, said.
Purchase price is $35,000 per acre.
Gestamp is buying 20 acres now and has a three-year option on the remainder of the land.
He said officials from Gestamp will be in time to begin talks with the city and county on the project.
Mr. Leach said Gestamp is on a "very, very tight schedule" and hopes to break ground by mid-August.
The property is on Hickory Valley Road on the West Campus of the industrial park.
Mr. Leach said he had not been made aware of any incentives that had been offered Gestamp. He said the firm may later file for a tax break on the major investment.
Gestamp will produce metal parts, including the undercarriage, for the VW mid-size sedan that will be produced in Chattanooga.
The Spanish firm will build a $90 million facility and add 230 jobs within three years, officials said.