Energy giant Centrica is to invest £63 million on a power station which will secure the site's future up to 2027.
The gas-fired South Humber station, which has been part-mothballed since earlier this year, will return to full service in 2017.
Jorge Pikunic, managing director of Centrica's distributed energy and power business, said: "This upgrade allows us to secure the future of this important power station for at least another decade.
"We were pleased to see the Government's announcements last week signalling the important role that power stations like South Humber Bank will continue to play for UK security of supply and look forward to hearing more about their plans to support investment in the sector.
"The market for gas-fired generation continues to be challenging but, with the right policy landscape, we are confident it can improve."
The power station, which was built in two phases from 1994, is capable of producing enough electricity to meet the needs of over one million homes - nearly half the homes in Yorkshire and the Humber.
In its strategic review in July, Centrica said it would invest to maintain and improve its gas-fired generation fleet where economics allowed.
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Phil Whitehurst, national officer of the GMB union, said: "This is great news for the power station workers and for those in the supply chain who manage and maintain this valuable generation asset.
"It is also good news for energy security. As the UK Government yesterday reversed the policy of investment in developing carbon capture and storage technology, the only show in town now is gas and nuclear."
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A Department of Energy and Climate Change spokesman said: "This is good news - one of the most cost-effective contributions we can make to emission reductions in electricity is by replacing coal fired power stations with gas.
"That is why we will be consulting on closing unabated coal-fired power stations and will be prioritising new gas-fired power stations."
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