Carrier poses an early critical test for Trump, who promised during the campaign to keep American jobs from fleeing to Mexico.
Trump and Mike Pence, the vice president-elect and current governor of Indiana, will be in Indiana on Thursday to announce the deal, Carrier said.
The company, which is owned by defense contractor United Technologies, announced in February that it would close two Indiana plants -- a Carrier plant in Indianapolis that employs 1,400 workers and a United Technologies Electronic Controls plant in nearby Huntington, Indiana, that employs 700.
The company planned to send that work to Mexico starting next year, a move that would have saved it $65 million a year in labor costs, according to the union that represents the workers.
United Technologies is a leading defense contractor that benefits from billions of dollars in federal spending, so it needs to maintain good relations with the incoming Trump administration.
United Technologies collects about $5.6 billion in annual revenue from U.S. government contracts, according to company filings, which is equal to about 10% of its overall revenue.
I will be going to Indiana on Thursday to make a major announcement concerning Carrier A.C. staying in Indianapolis. Great deal for workers!— Donald J. Trump (@realDonaldTrump) November 30, 2016
--CNN's Robert Ray contributed to this report.
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