Tennessee also was named Co-State of the Year, while Gov. Phil Bredesen, Economic and Community Development Commissioner Matt Kisber, and Revenue Commissioner Reagan Farr made the publication’s “Ten People Who Made a Difference” list.

“The partnership we have forged with Volkswagen is one that will last for generations to come and transform the economy of the Chattanooga area,” Bredesen said. “We are honored Southern Business & Development has recognized our efforts to create higher-skilled, better-paying jobs for Tennesseans by naming this project Deal of the Year.”

The Deal of the Year takes into account the scope of the project, its potential for growth and spinoff job possibilities.

Volkswagen recently marked the one-year anniversary of its decision to build the $1 billion facility and create 2,000 direct jobs. To date, nearly $436 million in local contracts have been awarded, and it is estimated that the plant is expected to generate $12 billion in income growth and an additional 9,500 jobs over the life of the project, according to the Tennessee Department of Economic and Community Development.

Volkswagen is on track to start production of 150,000 vehicles annually in early 2011, according to the state.

As Co-State of the Year, sharing honors with Louisiana, Tennessee distinguished itself by landing three $1 billion projects within eight months, including Volkswagen and the No. 1 and 2 polycrystalline silicon producers in the world, respectively, with Hemlock Semiconductor in Clarksville and Wacker Chemie AG in Bradley County, according to the Tennessee Department of Economic and Community Development.