The Wall Street Journal says the decision--which had been rumored for months--will help the automaker get its North American production in line with current demand. Toyota just opened a new factory in Canada to build the 2009 Toyota RAV4, and it recently juggled production of the Tundra pickup to account for slackening demand.
Prius sales have remained stable, even though gas prices have fallen dramatically since $4 peaks this summer. Toyota sales in general, though, have dropped nearly as sharply as those at the Detroit automakers in the wake of the financial panic.
The plant outside of Blue Springs, Mississippi, was originally intended to crank out the Toyota Highlander. When demand shifted to smaller cars, Toyota shifted its plans to build the third-generation Prius at the geographically remote factory. The automaker didn't disclose an opening date for the as-yet-unfinished factory to the WSJ.