Prime Minister David Cameron said: "As part of our plan to help Britain succeed, after months of negotiation, today we have a deal for the first nuclear power station in a generation to be built in Britain.
"This deal means £16 billion of investment coming into the country and the creation of 25,000 jobs, which is brilliant news for the South West and for the country as a whole.
"As we compete in the tough global race, this underlines the confidence there is in Britain and makes clear that we are very much open for business.
"This also marks the next generation of nuclear power in Britain, which has an important part to play in contributing to our future energy needs and our longer term security of supply".
Energy Secretary Ed Davey has hailed a landmark deal to build Britain's first new nuclear plant in a generation.
But ministers are likely to face criticism over the report price that will be paid for electricity produced at the Somerset - around £90.00 per megawatt hour according to reports - which around double the current market rate.
"We think it would be good value if (the strike price) was a little higher," the Liberal Democrat Cabinet minister said.
"I was determined to get them below £90 so I could prove to everybody we had got a good deal...
"What has driven a tougher deal is the fact that I made clear we could walk away from the table. We had other nuclear options."
A deal has been struck with the Chinese which should see the development of Hinkley Point C nuclear power station near Bridgwater.
Chancellor George Osborne has confirmed the government will allow Chinese companies to take a stake, possibly leading to majority control, in British nuclear power plants, including Hinkley C.
Chief Executive of Somerset Chamber of Commerce, Rupert Cox, says it's good news.
Chancellor George Osborne has announced that the government is to give the go ahead to Chinese firms taking a stake in the development of the next generation of British nuclear power.
He made the announcement at Taishan nuclear power station in Southern China on the final day of his visit to China.
The Chancellor said: "Today is another demonstration of the next big step in the relationship between Britain and China - the world's oldest civil nuclear power and the world's fastest growing civil nuclear power.
"It is an important potential part of the government's plan for developing the next generation of nuclear power in Britain. It means the potential of more investment and jobs in Britain, and lower long-term energy costs for consumers."
The Chancellor George Osborne will agree a deal this week that will see a Chinese firm become one of the main players in the building of a new nuclear power plant for Hinkley Point. It's a move that is welcomed by businesses in the area that will benefit.
Bob Constantine reports.
The Government announced in 2010 that Hinkley Point was one of 8 sites suitable for a new reactor. Then in 2011, EDF submitted a plan for development of a new reactor at the site, Hinkley Point C, and a new nuclear licence was awarded in 2012 - the first since 1987.
But since then the Government and EDF have been negotiating over the proposals, with a major sticking point being the guaranteed price paid for energy produced by the new reactor.
If the construction goes ahead the reactor could supply up to 7% of the country's energy needs.
The Energy Secretary Ed Davey has hinted that a new deal to build a reactor at Hinkley Point is close. Speaking at the weekend he said that Britain's energy sector was set to benefit from billions of pounds of investment from the Far East.
Mr Davey said "The Chinese, along with the Japanese and the Koreans are very interested in the opportunities in the British nuclear sector. I think it is really possible we will see massive Chinese investment".
Recent reports have suggested that the Chinese are set to take a stake in the consortium seeking to build the new reactor at Hinkley Point in Somerset
On the positive side, we will now have the 35 meter high T-Pylons rather than the proposed 50 meter high standard pylons and more towers will be removed than will be erected. Existing lines in Nailsea will be removed to the great benefit of local residents and one line will be removed on Tickenham Ridge. Moving the line of pylons away from houses and schools in West Nailsea is another positive development. I am also pleased that the original route to take the transmission line away from Portbury has been reinstated.
However, despite the adoption of the T-Pylons (which have never been used anywhere in Britain) the overhead technology remains rooted in the past and other, new, technologies such as GIL (Gas Insulated Lines) have not been fully considered. The impact on the environment is still greater than widespread undergrounding would achieve but significantly better than the original horror of the 50 meter towers. In particular, the issue of Tickenham Ridge has not been properly resolved.
The route electricity will take as it's carried from the proposed new nuclear power station at Hinkley Point has been revealed.
It'll mean around 140 new pylons will be put up along a route stretching 34 miles across Somerset.
But the National Grid says it'll bury some of the new cable underground and the new pylons will cause less disruption to the countryside.
But those who've protested over the issue say they're not being heard.
John Bevir reports: