A Lidl discount supermarket in Essen, Germany. (PATRIK STOLLARZ/AFP/Getty Images)

German discount grocer Lidl will launch its expansion into the U.S. market from Virginia, creating more than 700 jobs in Arlington and Spotsylvania counties as it establishes an American headquarters and distribution center, Gov. Terry McAuliffe announced Friday.

Lidl, one of the largest retailers in Europe, is expected to invest a total of $202 million to establish its U.S. corporate headquarters in Arlington and a regional headquarters and distribution center in Spotsylvania County.

McAuliffe (D) approved $7 million in incentive grants to seal the deal, which he announced after meeting with company officials at Lidl’s international headquarters in Neckarsulm, Germany. The governor is leading an 11-day, six-country trade mission to Europe, part of his push to expand and diversify Virginia’s defense-heavy economy.

“I was thrilled to meet with Lidl’s company leaders in Germany today to close this tremendous deal,” he said in a statement. “This is a significant win for Arlington County and Spotsylvania County, and the jobs and economic activity it will generate will contribute directly to my administration’s work building a new Virginia economy. Lidl’s investment demonstrates Virginia’s ability to attract companies from all over the globe.”

McAuliffe has made economic development the central focus of his administration since he lost a bitterly partisan fight over Medicaid expansion in his freshman year as governor.

Although he is energetic and exceedingly well connected, the former Democratic National Committee chairman has been up against the “head winds” of federal spending cuts, as he often puts it. Even though McAuliffe has reeled in capital investment at twice the rate of the past two governors, the state had economic growth of 0.0 percent in 2014, according to data released this week by the U.S. Commerce Department.

In job creation, the governor has found a cause with bipartisan appeal, although the Republican-controlled General Assembly has grumbled at times about his willingness to dole out incentive funds. In a smack at McAuliffe, the legislature this year renamed the Governor’s Opportunity Fund, making it the Commonwealth Opportunity Fund come July 1.

McAuliffe approved a total of $5 million in grants from that fund to assist Arlington and Spotsylvania counties with the Lidl project. He also approved $2 million from the Virginia Economic Development Incentive Grant, a self-funded program that awards money to projects with large numbers of employees and with wages that are far above the average for the area. Additional funds and services to support Lidl’s employee training programs will be provided through the Virginia Jobs Investment Program.

McAuliffe and his staff worked on the deal along with county officials and the Virginia Economic Development Partnership.

The Lidl deal is the second coup of the trip. Earlier in the week, McAuliffe finalized a deal with a Welsh company, Elephant Auto Insurance, to bring a $2 million expansion and 1,173 jobs to suburban Richmond.

Lidl will invest $77 million to create a U.S. corporate headquarters that will employ 500 in Arlington. And it will plow $125 million into the Spotsylvania regional headquarters and distribution center, where 200 people will work.

Lidl operates nearly 10,000 stores in 26 countries throughout Europe. It is part of the Schwarz Group, the largest retailer in Europe.

“We are excited to take this important step to launch Lidl’s expansion into the United States and look forward to introducing American consumers to a different type of shopping experience,” said Brendan Proctor, president of Lidl U.S.

The company plans to open its first U.S. stores no later than 2018, said John Froman, public relations and marketing manager for MGP Retail Consulting. He said that the company is not ready to announce the locations of those stores and that store sizes are still under development.