The launch of the three-door hatchback took place at the Mini's production plant in Cowley, Oxford, on the 107th anniversary of the birth of the Mini's founding father Alex Issigonis. Prices will start at about 13,500 pounds ($21,700).
"It's a brand new car under the skin and it retains that go-kart feel to drive," said BMW board member Peter Schwarzenbauer, who was driven on to stage to the music of British band Blur in a Mini adorned with the Union Jack flag.
Describing the new Mini as "original and still cheeky," he said it would appeal to "young people with their finger on the pulse" and older Mini fans. The previous Mini generation was launched in 2007.
Production of the new Mini will start later this week and it will go on sale in Britain early next year. It will be based on a brand new BMW-engineered platform called UKL1.
The small, fast and affordable original Mini was hugely popular when it first went on sale in 1959 and has been a big success story for BMW since it revived the brand in 2001, growing sales volumes by 21 percent to more than 285,000 cars last year.
It has also seen an influx of competitors into the high-end compact car sector in recent years such as Fiat's 500 and Opel's Adam, which are courting environmentally-conscious city dwellers in want of easy-to-park vehicles.
The new range, which will be displayed later this week at the Los Angeles and Tokyo motor shows, will continue to include a basic MINI One, mid-range MINI Cooper and MINI Cooper D diesel, as well as a top-spec MINI Cooper S version. They are taller, longer and wider than the previous generation.
The car features a new grille, LEDs on the front lights, a steeper windscreen and a lower rear bumper. It will come with a choice of three new 3 or 4 cylinder engines with fuel consumption reduced by about 27 percent, Schwarzenbauer said.
The new MINI One will be the entry-level model and prices should start at around 13,500 pounds, with the MINI Cooper, which comes with more equipment and a more powerful engine as standard, coming in at around 15,000 pounds, a source close to BMW said.
There will also be a 16,000 pound diesel version of the Cooper, called the MINI Cooper D, which will be the most economical model in the range. The MINI Cooper S, costing 18,500 pounds, will be the fastest and most powerful model.
The MINI Cooper and Cooper D will be around 400 pounds more expensive than current models, the source said.
BMW also said it would invest 750 million pounds at its three British plants in the coming years, with 500 million of that being pumped into the plant in Oxford, where a new body assembly arena has been built featuring 1,000 robots, more than double the amount used on previous versions.
It said the investment would support its international growth plans for the Mini, which will expand its current line-up of seven models to include up to 10 different body styles in the medium term.
"Mini is in good hands with BMW," British transport secretary Patrick McLoughlin said.
"The success of the Mini proves Britain's manufacturing sector is good enough to compete and win on the global stage."