Gwangju city government and Hyundai Motor will hold a ceremony on Thursday to sign an agreement on their low-wage carmaking joint venture known as the "Gwangju job project."

Some 400 people, including government officials, lawmakers and members of the city's negotiating committee will attend the ceremony at the city hall starting 2:30 p.m.

The joint venture will build a factory with an annual production capacity of 100-thousand vehicles that is expected to create jobs for up to 12-thousand people.

Workers will be paid an annual wage of 35 million won, less than half of what the automaker’s unionized workers earn. However, the local government will make up for lower wages with housing, education and health care.

The deal was struck Wednesday after labor representatives in the negotiating committee agreed to suspend annual wage negotiations for the first five years with a clause stipulating that it could be reduced under special circumstances.

Members of South Korea's umbrella labor group Korean Confederation of Trade Unions, as well as the automaker and its affiliate Kia Motors' union plan to protest the deal in front of the city hall, which they fear would eventually take away production and jobs.