The move came as full production resumed at the firm’s Swindon plant following supply problems, with the company launching its new Civic.
Swindon’s Car Plant 2 will return to a two-shift operation in the late spring of next year, creating a need for the new jobs in addition to the current 3,000 workforce.
Honda Motor Europe President Manabu Nishimae said at the Swindon plant: “The last three years have been extremely difficult for all of Honda’s European operations.
“We have faced many challenges beginning with the economic downturn through to the two natural disasters in Japan and Thailand.
“Throughout this period, associates have remained committed and I am extremely proud of how they have responded to these challenges.
“We will build upon our new-found strength and remain confident of our ability to achieve and succeed in the future.”
Prime Minister David Cameron commented: “This is great news and a tremendous boost to the workforce, the car industry and UK manufacturing.
“Honda is contributing to a real renaissance in the UK automotive industry, we have a highly skilled workforce and we continue to be at the forefront of new technology and development.
“Its success is of great importance to our economy and we are committed to do all that we can to see this vital industry grow and thrive.”
Business Minister Mark Prisk added: “Today’s announcement of the creation of 500 new jobs on the day that production started on the next generation of the Civic hatchback is a clear demonstration of Honda’s continued commitment to the UK.
“It is a huge vote of confidence in the skills of the Swindon workforce and the current strength of the automotive sector. The decision reinforces the message that the UK remains a great place to manufacture high quality products.”