The City Council on Tuesday night approved a Tax Increment Financing district (TIF) at the Tubman site in East Chattanooga.
Approvals are still needed from the County Commission and some state agencies.
The city's Industrial Development Board (IDB) on Monday had given its okay.
The TIF would use tax proceeds from the district for $5.4 million in infrastructure improvements over the next 20 years. That includes rebuilding a road to the plant site at the rear of the property near railroad tracks.
Nippon Paint is planting a $59 million automotive paint facility at 29 acres of the former public housing project.
The paint plant, which will hire 150 workers, will not take all the Tubman site. There will be 15 acres remaining as well as five acres across Southern Street owned by the city.
There will be a public hearing in January on what residents want to see on those 20 acres. A Request for Proposals is to go out in February with a "master developer" in place by March to being developing that portion.