Toyota will consolidate its American operations at a single campus in north Texas, cutting "about 1,000" employees at the Erlanger, Ky. engineering and manufacturing plant.
Those employees will have to relocate to Plano, Texas over the next 2-3 years.
In a statement, Gov. Steve Beshear said he is disappointed by the move.
"We would have welcomed the opportunity to discuss options with Toyota, but we will now turn our attention to preparing for this transition," Beshear said.
Beshear said Toyota will offer industry-leading plans and programs to its affected employees.
The new headquarters will also draw 2,000 employees from Toyota's Torrance, Calif. location with initial moves beginning in small groups this summer.
In support of the affected communities in Kentucky and California, Toyota announced a $10 million commitment to provide continued funding for local nonprofits and community organizations in these states over a five-year period beginning in 2017.
Toyota has invested $6 billion in Kentucky over the last 30 years and will still have 8,200 employees in the commonwealth after the move.