Leeds could be in the frame for a 40,000sq metre train manufacturing plant that could create up to 1,000 jobs.
Spanish train maker Talgo has announced that Leeds City Region is on the UK shortlist of six regions to become the home for facility.
The other potential sites are St Helens, Chesterfield, Mostyn in Wales, and Hunterston or Longannet in Scotland.
A decision on a preferred site is expected next month, although a final go-ahead would depend on the company obtaining an initial order.
Talgo is itself on the shortlist to produce trains for HS2.
Councillor Judith Blake Leader of Leeds City Council said: “Over the last 18 months we have been working closely with Talgo to help make this significant opportunity a reality.
“We believe we have a unique fit with Talgo which is supported by our HS2 Growth Strategy.
“Our rail research capability in Leeds City Region includes the Institute for High Speed Rail at the University of Leeds and the Institute for Railway Research at the University of Huddersfield.
“In addition, Leeds is a HS2 destination city at the heart of the Northern Powerhouse and has been selected as a location for the HS2 rail supply depot.
“Together with a manufacturing skills base of 144,200 people and an extensive supply chain we are confident our offer is compelling.”