The French firm will also supply another model of compact van for its Japanese partner from its Vigo plant in Spain as of 2019, they added in a statement.

Toyota will take full ownership of the Czech plant of Kolin from January 2021, and the factory will continue to produce "the current generation" of compact cars for the two companies.

It currently turns out Peugeot 108, Citroen C1 and Toyota Argo models.

"Toyota intends to continue production and employment in the future at the Kolin plant," the companies said, without disclosing financial details.

PSA already assembles vans for Toyota at its Sevelnord plant in northern France.

(Reporting by Gilles Guillaume, Writing by Sarah White; Editing by Adrian Croft)