The French government reached a compromise late on Friday with steel giant ArcelorMittal, ending a row over the steelworks that the government had threatened to nationalise.
Under the deal ArcelorMittal will invest 180 million euros ($A225.72 million) over the next five years in its Florange steelworks, the French government announced late on Friday in Paris.
The more than 600 employees will not need a redundancy package, French Prime Minister Jean-Marc Ayrault said.
The company, owned by Indian steel baron Lakshmi Mittal, said that for now it would not dismantle two ArcelorMittal blast furnaces that are sitting idle.
The compromise came a few hours before a midnight deadline for the government to find a buyer for the two blast furnaces in the eastern Lorraine region.
The government had threatened to nationalise ArcelorMittal's entire operation at Florange unless the company agreed to sell the entire site.
ArcelorMittal had refused to sell the entire site, which includes a healthy steel processing business, saying it only wanted to close the furnaces because of falling European demand for steel.
Industrial Recovery Minister Arnaud Montebourg had said the nationalisation would be temporary, until a new investor took over.
His nationalisation threat shocked investors in France and abroad, where it was seen as proof of an anti-business slant in President Francois Hollande's left-wing administration.
Laurence Parisot, head of employers federation Medef, had warned nationalising the site would be "scandalous".
ArcelorMittal said nationalisation would jeopardise its entire French operations, which employ 20,000 people.