The automaker said the compact car, named the IONIQ, achieved world-class fuel economy of 22.4 kms (13.92 miles) per litre. There is no equivalent number for the latest Prius, which has not been launched in Korea yet.
Hyundai said the IONIQ would be rolled out in mid-January in Korea with a starting price of about 22.9 million won ($19,145), similar to the basic version of its Sonata mid-sized sedan.
The launch comes as slumping oil prices have cut petrol prices, encouraging drivers to switch from fuel-sipping cars to gas-guzzling sport utility vehicles. Toyota, which dominates the gasoline-hybrid car market, last month trimmed its global sales target for the new Prius to 300,000-350,000.
The IONIQ featured a 1.6-litre engine with a thermal efficiency of 40 percent, a measurement of how well an engine converts the burning of fuel into motive power, Hyundai said. The fourth-generation Prius also has a thermal efficiency of 40 percent.
The IONIQ is the world's first car to offer three different electrified versions, including plug-in hybrid and full electric cars.
Hyundai has so far launched hybrid variants of their existing models like the Sonata and the Azera, but this is the first time it has made a hybrid-exclusive car.
Affiliate Kia Motors also plans to launch its first hybrid-dedicated model this year.