A company that builds cancer-fighting proton therapy machines will set up an assembly, test and training plant in Adelaide.
Work on ProTom's centre of excellence will begin later this year and is set for completion in 2019.
The base will create 100 ongoing jobs, as well as 65 temporary positions during construction.
Chief executive Stephen Spotts said South Australia was chosen for the quality of its workforce.
"Engineers and tradespeople in knowledge-intensive sectors like aerospace, defence and automotive are what we're looking for, and we're thrilled by the level of talent in South Australia," he said.
"The creation of a centre of excellence will facilitate expanded opportunities for research collaboration with local universities, including more educational offerings in proton radiation therapy."
Proton therapy units, used to precisely target tumours with radiation, are only manufactured by a handful of companies worldwide.
The South Australian government provided ProTom with $5 million in grants and $5 million in loans to establish its centre in Adelaide.
Mr Spotts told reporters the company would have set up in the state without the money, but was grateful to have found a "partner" in the government.
Premier Jay Weatherill met with Mr Spotts at the site on Thursday and said the company's establishment was a win for jobs in SA.
"ProTom joins German (energy) storage company sonnen and cyber security company VeroGaurd Systems, as the latest manufacturers the state Labor government has attracted to South Australia," he said.