Volvo Trucks will roll out locally assembled lorries in 2018 as part of a Sh2.5 billion ($25 million) investment.
Volvo Trucks' local dealership partner, Necst Motors, will provide the capital for the establishment of an assembly line to be housed at the Associated Vehicle Assemblers (AVA) plant in Mombasa.
Necst has also committed to set up 20 Volvo Trucks workshops in the East African region over the next five years.
"We believe strongly in the growth of this region, Kenya and the neighbouring countries, and that's why we think now is a better time to invest in this country," said Volvo Trucks' president, Mr Claes Nilsson.
Kenya will become the third African country to host Volvo Trucks assembly facility, after South Africa and Morocco.