The government has announced it has found a "strategic investor" to help revive the collapsed Pan Paper Mills in Webuye.
President Uhuru Kenyatta said on Thursday that the investor had agreed to pump in Sh6 billion over the next three years after purchasing the company's assets.
He said the factory is expected to reopen within three months.
The investor, associated with several sugar industries, a plywood firm and an edible oil refinery in the country, is said to have purchased the firm for about Sh900 million, beating five other bidders.
The announcement is good news for Bungoma County residents and specifically Webuye town, where many people lost their jobs or business deals when the firm collapsed more than a decade ago.
In 2010, then President Mwai Kibaki held a colourful ceremony in Webuye during which he switched on the factory machines to signify revival.
But the factory was shut down shortly after though the government had pumped in Sh400 million for its revival.
On Thursday, President Kenyatta told a press conference that the new revival bid is in line with his government's policy to rehabilitate collapsed industries.
"We promised to do our level best to improve the lives of the people. This revival will be a major milestone in the journey to industrialisation," he told reporters at State House, Nairobi. He was accompanied by leaders from Bungoma County, including Governor Ken Lusaka.
"The good news is the investor has given us assurance that former employees of the company will be given priority for reabsorption when the mill starts operations."