Construction of the new facility will commence in early 2013 once planning is complete.
It is understood that half the jobs will be in the research and development division of the firm.
Taoiseach Enda Kenny said: "The decision by Kerry Group, with the support of the Irish Government, to establish this ground breaking facility in Ireland will bolster our strong reputation as a globally renowned country for food production and innovation.
The creation of 800 high skilled jobs going into this facility in addition to the 400 immediate construction jobs will be a great boost to the economy and for the people working in these industries."
Minister for Food, Simon Coveney said: "Today is a phenomenal announcement and is perhaps the most significant investment ever in the Irish Agri-Food industry. Not only is this an announcement of 800 high end jobs, but it is the proof that the agri food sector can be central to rebuilding the Irish economy.
"This investment is a statement of confidence in the Irish economy and in the quality of Irish food science graduates to deliver food innovation in the most modern facility of its type on the planet. The agri-food and food innovation sector will continue to provide positivity and optimism in the Irish economy. "
CEO of Enterprise Ireland Frank Ryan added: "Food is Irelands number one export sector and critically important to our economy and to export-led growth. This centre will be one of the worlds most advanced food innovation facilities. It will underpin Irelands world-wide reputation in food innovation and secure our standing as a world leader in the food industry."
Headquartered in Tralee, the group employs more than 24,000 people in its manufacturing, sales, technology and application centres across Europe, North America, South America, Australia, New Zealand and Asia.