Ciaz will be available in petrol and Diesel fuel options powered by a 1.4 litre and 1.3 litre engines respectively.
"The global launch of Ciaz is planned during the forthcoming festival season," the company said in a statement.
Ciaz' main competitors will be Honda City, priced between Rs 7.19 lakh and Rs 11.05 lakh, and Hyundai Verna tagged between Rs 7.39 lakh and Rs 11.72 lakh (ex showroom Delhi).
The company claims that Ciaz diesel has a fuel efficiency of 26.21 kmpl while petrol delivers a mileage of 20.73 kmpl.
The new model will replace the SX4 sedan, which had limited success. MSI has been trying hard to gain greater presence in the bigger car segment.
Last month, MSI's total sales grew by 26.9 per cent at 1,10,776 units as against 87,323 units in August last year.
Domestic sales during the month stood at 98,304 units, up 29.3 per cent from 76,018 units in August of previous year.
The sales growth was driven mainly by compact cars comprising Swift, Estilo, Celerio, Ritz and Dzire, which were at 46,759 units in August as against 30,512 units in the year-ago month, up 53.2 per cent.