But GAZ did not disclose the terms of the deal, under which it will produce Chrysler Sebring and Dodge Stratus vehicles.
GAZ said it had purchased equipment from DaimlerChrysler's Michigan-based Sterling Heights Automotive Plant, where the two models are manufactured, to organize a production line on its own premises in the Volga Region city of Nizhny Novgorod.
The facility, to be constructed with help from DaimlerChrysler, will have an initial capacity of 65,000 cars per year, GAZ spokesmen said.
GAZ also plans to sign an exclusive long-term agreement on the supply of DaimlerChrysler engines made at a plant in Mexico.
The company exports to 29 countries across the former Soviet Union, Eastern Europe, Southeast Asia, Africa, Latin America, and the Middle East. Its annual output is about 200,000 units.
GAZ is best known for its Volga sedans, a status symbol in Soviet-era Russia. Sales of the brand, launched in 1956, have been falling steadily since the 1990s when the country opened its market to foreign producers.
