Pixar, producers of the 2001 animated feature Monsters Inc., was attracted to Vancouver by tax incentives offered by the province. (Pixar)

Disney-owned Pixar plans to open a 20,000-square-foot animation studio in downtown Vancouver.

The studio, creator of blockbusters such as Finding Nemo and Wall-E, plans to create shorts involving some of the popular characters from its hit films, including Toy Story's Buzz Lightyear and Woody.

"The operation will be small in size and dedicated to producing short-form quality computer animation for theme parks, DVDs, television and theatrical exhibition … for several different divisions of the Walt Disney Co.," Disney/Pixar president Ed Catmull said in a statement Friday.

The new Vancouver facility is expected to open in the fall and create up to 100 jobs.

B.C. Finance Minister Colin Hansen says he met with Pixar officials last fall and wooed them with Digital Animation or Visual Effects (DAVE) tax incentives offered by the province.

"They were looking at the DAVE tax credits, the digital animation... I forget what they stand for now — these tax credits that aren't unique to British Columbia but I think when you combine it with the very talented people that we have in Vancouver and the work environment, they certainly recognized that this was the place where they wanted to open a new office," he told CBC News.

Pixar's feature work and 3-D animation will continue to be done at its Emeryville, Calif., headquarters.

Pixar general manager Jim Morris agreed B.C.'s tax incentives were a factor in deciding on a Vancouver location and added that Pixar also favoured Vancouver because it was close to the studio's home base.

Vancouver also has been successful in attracting animation company Rainmaker and visual effects firms CIS Vancouver and Moving Picture Co.

The news comes on the heels of an announcement earlier this week by eBay that it will close its Vancouver facility in September, resulting in the loss of 700 jobs.