Modern manufacturing systems have become increasingly complex and require a skilled workforce, demanding innovative educational approaches to bridge theoretical knowledge and practical skills. This VR approach addresses STEM education challenges by fostering experiential, competency-based learning by investigating how immersive VR can enhance learner engagement, motivation, and learning in engineering education settings. We propose the use of learning factories as an approach to close the gap between theoretical knowledge and practical skills. Immersive Learning factories integrate Virtual Reality (VR) technologies as an experiential learning approach to support engineering education and manufacturing workforce development. Based on the LEAD Factory at Graz University of Technology, a fully immersive VR environment was developed to simulate real-world assembly and layout planning tasks. This virtual learning factory includes multiple layout configurations, interactive tools, and a “Build Your Own Factory” feature for custom workflow design, providing a specific training case. This descriptive study involving 30 participants evaluated the system's effectiveness across four key domains: creativity in layout design, usability, learning motivation, and cognitive load. Results show that participants (67 %) were able to deliver high-quality functional designs and reported high usability scores (mean SUS = 83.9), strong intrinsic motivation (mean interest = 5.9/7), and low average cognitive load (mean NASA-TLX = 4.44/20). In conclusion, participants were able to independently design functional layouts, engage meaningfully with the tasks, and complete them with minimal frustration. These findings not only suggest that VR-immersed learning factories are an effective, scalable, and engaging platform for industrial education and skills development but also provide valuable evidence on how immersive environments can foster motivation and reduce cognitive load in technical engineering education.