Makers reportedly wanted $1B in incentives for new plant.
In October, Toyota reduced the size of its initial investment in a new plant in Mexico.
North Carolina has four "megasites" that have been built to accommodate large industry such as automotive or airplane.
The Japanese automakers announced the plans for the new plant in August, saying the move will create 4,000 jobs.
Alabama is the other state still in the running to get the factory.
Bloomberg has previously reported that the companies want a $1 billion incentive package. Tennessee, Texas and SC were recently still in consideration, the people told Bloomberg.
While Toyota has facilities in Texas and Alabama, only Alabama survived the cut.
North Carolina is the only state in the Southeast without a major auto manufacturing plant. Toyota plans to assemble the Corolla sedan at the plant, while Mazda said it will use the factory to produce new crossover vehicles for the USA market. The plant will be able to produce 300,000 vehicles annually, and both companies hope to start operations in 2021.
According to a formal announcement earlier this year by the two companies, their alliance will be far reaching and will see Toyota acquire a 5% stake in Mazda, the smaller maker taking a stake in its new partner, as well.