In a statement released by Tesla, Sandoval said the gigafactory will create $100 billion in economic impact for his state over 20 years.
"Even the most skeptical economist would conclude that this is a strong return (on investment) for us," Sandoval said.
Sandoval and Tesla founder Elon Musk held a news conference about the deal earlier today, where the governor called it a "monumental announcement that will change Nevada forever."
"The Gigafactory is an important step in advancing the cause of sustainable transportation and will enable the mass production of compelling electric vehicles for decades to come," Musk said in a statement.
Musk indicated earlier this summer how competitive -- and mega-expensive -- the race has been. During Tesla's earnings call in July, he indicated he was expecting the winning state to provide upwards of 10 percent, or $500 million, of the upfront costs of the $5 billion factory. Panasonic, Tesla's partner for the factory, could put up to 30 to 40 percent of the cost, Musk said, while other suppliers could chip in 10 percent.
Musk teased that Reno, Nevada, had already beaten the other states to the punch, saying Tesla had already broken ground on a potential location in Reno.
Reno is about four hours away from Tesla's headquarters in Palo Alto, California, and its assembly plant in nearby Fremont, California. Plus, the location in Nevada would provide important access to raw lithium materials, central to the batteries, the Wall Street Journal noted.
Officials from California started engaging Tesla in 2012 about its gigafactory, plus other in-state manufacturing plants in Lathrop and Newark, California.
Alexis Georgeson, a spokeswoman for Tesla, said Wednesday in a statement, "We continue to work with the state of Nevada and look forward to joining Gov. Sandoval and legislative leaders ... in Carson City."
Tesla said that "discussions with the other states in the process are ongoing," and that the company has "always said we anticipated breaking ground at more than one site for the gigafactory."
Other states, such as California, said they are still in the fight.
“No other state has added more jobs than California since the recovery began and we’ll continue to work closely with businesses, including California-based Tesla, that want to grow here," Brook Taylor, spokesman for the California Gov. Brown's Office of Business and Economic Development, said in a statement.
The Associated Press contributed to this article.