The firm said it plans to locally produce the Hilux model at the new plant from February 2021 and would invest $52.6 million in the factory in a special economic zone outside Yangon.
The plant's output will be relatively modest, with plans to build 2,500 Hilux vehicles a year.
But the announcement follows the lead of other carmakers who have established local factories, including Suzuki, Nissan, and Ford.
The government introduced auto import restrictions in 2017, and a fall in prices has seen the auto market grow, with many new vehicles built locally.
The Automotive Association of Myanmar said the Toyota announcement was a "surprise," but welcome news.
The brand is already popular in the country, though most of its cars on the road are secondhand models.
Toyota says demand for new cases is on the rise though, nearly doubling last year to 18,000 units. – Rappler.com