A high-performance AMG version of the third-generation Mercedes-Benz A Class luxury hatchback has been speculated on for close to two years but now, finally, we have some official details on the matter.

Mercedes-Benz has confirmed that the new hot hatch will be called the A45 AMG (previously thought to be an A25 AMG) and that it will go on sale in Europe early next year, where it will go up against rivals such as the Audi RS3 and BMW M135i.

The A45 AMG will be just one of three new compact models developed by Mercedes’ in-house tuner AMG, the others being AMG versions of the U.S.-bound CLA four-door coupe and a planned CLA Shooting Brake.

While the A45 AMG is unlikely to be sold in the U.S., the boss of AMG, Ola Kallenius, has revealed to AutoWeek that the two CLA-based AMG models, likely to be called the CLA45 AMG and CLA45 AMG Shooting Brake, will reach U.S. showrooms sometime in 2014.

All will be powered by a new turbocharged 2.0-liter four-cylinder engine, the first engine in an AMG model to be transversely mounted. This engine is based on the unit fitted to the lesser A250 model but gains a unique cylinder head and induction system to help it develop at least 330 horsepower and more than 295 pound-feet of torque. Drive will be sent to all four wheels a seven-speed dual-clutch gearbox and multi-plate clutch all-wheel drive system with rear biased torque distribution.

The engine will be the most powerful four-cylinder ever fitted to a production Mercedes-Benz model, and its specific output per liter will also surpass that of its rivals by a significant margin. By comparison, the RS3’s turbocharged 2.5-liter engine is rated at 335 horsepower and 332 pound-feet of torque, while the M135i’s turbocharged 3.0-liter engine is rated at 316 horsepower and 332 pound-feet of torque.

Performance of the A45 AMG and its CLA-based cousins should be scintillating, with 0-60 mph times coming in at 5.0 seconds or less. Top speed will be almost certainly be limited to 155 mph, though there may be upgrades offered to raise this limit.

To make sure the cars will be able to handle well, they’ll come fitted with MacPherson strut suspension up front and a multilink setup in the rear, along with custom bushings, a wider track than the standard model, stiffer springs and dampers, thick antiroll bars and uprated brakes. The new A Class’ electromechanical steering system will remain, albeit with some tweaks for improved accuracy and feel.

Pictured above is a prototype of the Mercedes-Benz A45 AMG spotted testing in Germany. Exterior elements that will be unique to the car will be a sporty set of bumpers, large-diameter wheels and a rear diffuser with a pair of integrated exhaust tips.