Indian company Tata Motors is to take over the running of motoring marques Land Rover and Jaguar in a deal worth around $2.3 billion (about £1.15 billion).
Tata will replace US car giant Ford as the new owner of the companies in a move which will safeguard thousands of UK jobs.
Tony Woodley, joint general secretary of the Unite union, said today: "We would have much preferred Ford to keep the companies in the family, so to speak, especially with Land Rover being so profitable.
"But with the commitments Tata have given to the future of Jaguar (and) Land Rover and the long-term supply agreements for components, especially engines from Bridgend and Dagenham, we're obviously pleased they are in the game."
Mr Woodley said he was unhappy that Ford had decided against taking a stake in the new future.
"That is a big disappointment," he said.
Richard Burden, Labour MP for Birmingham Northfield and chairman of the All Party Parliamentary Motor Group, said: "I welcome today's announcement. Both Jaguar and Land Rover are parts of the fabric of the manufacturing base of the West Midlands. They produce quality products in the high-value segment of the motor industry - an area in which the UK excels.
"Tata is a forward-looking global company. All the indications are that Tata recognises the huge potential of Jaguar and Land Rover to become part of its group in a way that maintains the pace of investment and product development at the same time as retaining the essential Britishness of the Jaguar and Land Rover brands. That will be vital to safeguarding thousands of jobs in the Midlands and elsewhere."
He added: "As well as celebrating the link-up between Tata and Jaguar Land Rover, we should also emphasise the value which British companies bring to the Jaguar and Land Rover supply chain.
"Companies in the UK's components industry have already done a great deal to improve quality and encourage innovation across the motor industry and beyond. Tata's ownership of Jaguar and Land Rover brings both new opportunities and new challenges to those companies.
"It is important that we back the UK components industry to seize the opportunities and rise to the challenges ahead."
Ford said the sale was expected to be concluded by the end of June and that it would then contribute up to about 600 million dollars (about £300 million) to the Jaguar and Land Rover pension plans.
Tata Motors chairman Ratan Tata said: "We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business. We have enormous respect for the two brands and will endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact.
"We aim to support their growth, while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business."
Ford Motor Company president and chief executive Alan Mulally said: "Jaguar and Land Rover are terrific brands. We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata's stewardship. Now, it is time for Ford to concentrate on integrating the Ford brand globally."
Lewis Booth, Ford's executive vice president, who has responsibility for Ford of Europe, Volvo and Jaguar Land Rover, said: "This is a good agreement. It provides the Jaguar Land Rover management team and employees with the assurances needed to maintain their focus on delivering the best results for the business.
"I am confident that, under its new owner, Jaguar Land Rover will continue to build upon the significant improvements and product successes it has achieved in recent years."
As part of the transaction, Ford will continue to supply Jaguar Land Rover for differing periods with powertrains, stampings and other vehicle components, in addition to a variety of technologies, such as environmental and platform technologies.
Ford also has committed to provide engineering support, including research and development, plus information technology, accounting and other services.
In addition, Ford Motor Credit Company will provide financing for Jaguar and Land Rover dealers and customers during a transitional period, which can vary by market, of up to 12 months.
The parties do not anticipate any significant changes to Jaguar Land Rover employees' terms of employment on completion.