The two firms had announced a tentative agreement to develop hybrids last December, which has become "a binding and definitive agreement on development of a full hybrid system," with effect from this month.
GM is gearing up to launch a belt alternator/starter hybrid system that its Saturn brand will be the first to debut in mid-2006.
The system is one of three hybrids that GM plans to introduce on up to 12 models. It has a parallel hybrid system launched in its first hybrid pickups in 2004 and is developing an all-new two-mode full hybrid system which will first be marketed in GM’s new Chevrolet Tahoe and GMC Yukon full-size SUVs in 2007. The system is based on GM’s diesel-electric hybrid propulsion system for buses.