The investment will create 400 jobs over the next 12 months at Toyota's Blue Springs, Mississippi, plant.
Toyota said the investment will include replacing the current production lines, allowing the facility "to produce advanced vehicles more efficiently and better adapt to changing market needs."
The move is part of a commitment made by the automaker in 2017 to spend $10 billion in its U.S. manufacturing operations over the next five years.
Unlike U.S. automakers General Motors, Ford and Fiat Chrysler Automobiles — which are pulling back from passenger cars as American consumers abandon them in favor of higher-margin, more comfortable pickup trucks, SUVs and crossovers — Toyota, Honda, Nissan, Hyundai and Volkswagen have all invested in all-new versions of their sedan models.
Reporting by Nick Carey