The NT government has signed a memorandum of understanding with Taiwanese company, Aleees and Perth-based Avenira Ltd, to develop the plant on a yet-to-be-chosen site.
It's estimated the project will initially create 100 jobs, growing to 1000, and generate close to $6 billion annually once in full production.
A final investment decision on a pilot plant is expected in early 2023.
Once operational, the pilot facility will manufacture up to 10,000 tonnes of lithium-iron phosphate battery cathode material each year.
It will exclusively source phosphoric acid from the Wonarah Phosphate Project in the Barkly region.
Lithium cathode material is critical to electric vehicle and energy storage batteries influencing their capacity, safety and durability.
"Increasing demand and the transition to renewable energy, battery storage and use of high technology products has resulted in global organisations looking to establish diversified, reliable and stable supply chains," Chief Minister Natasha Fyles said.
"The project will position the Territory as the next Australian home of advanced manufacturing, develop new skills and jobs, as well as support our objective to achieve a $40 billion economy by 2030."
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