A $266,200 state grant will pay for flat-mounting a large "Volkswagen Chattanooga" sign on the roof of the automaker's plant.
Also, VW and city officials had considered a plan to use solar-powered LED lights to illuminate the giant letters.
Steve Leach, the city's public works administrator, said that concept proved too expensive. The photovoltaic roof system would have added about $158,000 to the price tag, documents show.
The city's Industrial Development Board agreed Tuesday to accept the state grant for the sign, and city officials will take bids on the project Feb. 9. The funds are expected to pay for all of the construction, they said.
The money for the project comes from a $2 million pool the state committed to VW for marketing and public relations as part of the incentive package to woo the automaker to Tennessee, Leach said.
The sign is expected to be about 650 feet wide and 208 feet deep, according to documents received by the board. The letters will be applied in a black acrylic coating to the existing white rooftop, documents said.
The sign will be applied in letters so big that it can be seen by aircraft flying in and out of Chattanooga Airport.
"It's almost like a paint or epoxy material applied to the top of the roof," City Engineer Bill Payne said. "It's not visible from any of the streets."
He said that because it's not to be visible from the streets, the city's sign ordinance isn't applicable.
Frank Fischer, chief executive of VW's Chattanooga operations, said the sign will be visible from viewing Google Earth on a computer.