The next generation of the LQ2 engine will be unveiled on Monday in Dublin.
It will be a five-cylinder, twin-turbo petrol-electric hybrid engine designed to compete in the high-performance market.
This engine, named LQ-4, will be the first to use a new technology that has been developed in-house.
The engine has been designed to be as light and efficient as possible to achieve the optimum power output, said Ravi Shankar, head of product management at Daimler, in a video briefing.
It uses a three-cylindrical cylinder with a bore of just 5.5mm and a stroke of only 9mm.
It will have a maximum output of 890bhp (620kW) and a torque of 1,250Nm (570lbft).
The LQ3 engine, also known as the Lq2, will also be announced in Dublin on Monday.
The Lq3, like the L4, uses a five cylinder with twin turbochargers and an output of 690bp (560kW).
It has a maximum power output of 745bhp and a maximum torque of 590Nm.
It is expected that the L3 engine will also feature a new, larger twin turbo to provide more torque and better efficiency.
The new LQ engine will come as part of a new generation of electric vehicles, called Plug-In Electric Vehicles (PEVs), which are expected to debut in the 2020s.
The next generation will use the same engine as the existing LQ engines but will use a different, more powerful version of the petrol-diesel hybrid engine.
The engines, which are being developed by the German company BMW, will power the new PEVs.
Daimler and BMW are partnering to develop the technology that will enable the next generation engines to achieve more efficient and more powerful power.
It was announced last year that Daimlers planned to introduce a new petrol engine, LQ8, in 2020.
The new engine, which will be developed by BMW, is expected to feature a power of 476bhp.
The diesel version of Daimles next generation engine will use an 8.6 litre (21.6 gallon) cylinder with an output up to 536bhp, and it is expected the new engine will have similar torque to that of the diesel LQ6.