A Palestinian entrepreneur had to submit a request to build the factory to the Coordinator of Government Activities in the Territories. Defense Minister Moshe Ya'alon then decided to accept COGAT head Maj.-Gen. Yoav Mordechai's recommendation.
The factory will at first create jobs to hundreds of Palestinians and later on to 3,000 workers.
It will be built in the Karni industrial area, and its construction will take six months.
While the Karni border crossing is closed, the industrial area is still active, and includes mostly storage spaces used by international organizations and cooling structures used by Palestinian merchants.
The Karni border crossing, however, will remain closed even after the factory is operational, and any transfer of goods will be done through the Kerem Shalom border crossing.
The defense establishment hopes this factory, like other planned factories, will drive the Strip's economy, decrease terrorism and lead to the acceleration of Gaza's rehabilitation.
So far, Gaza residents received Coca Cola products from a factory in Ramallah, which often led to a shortage whenever the border crossings closed.