The Urus, as the four-wheel drive "super SUV" will be known, was revealed at the Volkswagen group-owned company's historic home near Bologna.
It will reach a top speed of 305 kph (190 mph), can go from zero to 100 kph in 3.6 seconds and brake from 100 kph to zero in 33.7 metres, company officials said.
Building the Urus, which will be sold in Europe for €171,500 ($203,000) excluding taxes, was "challenging at every level," said Lamborghini CEO Stefano Domenicali.
With its 650-horsepower, twin-turbo V8 engine, the Urus is something that has never been seen before on a road, according to the firm's design director, Mitja Borkert.
He said the SUV was inspired by two emblematic models from the past -- the LM002 that was the company's first foray into SUVs (it was dubbed the Lamborghini Truck), and the distinctively wedge-shaped Countach sportscar of the 1970s and 1980s.
The SUV "allows you to travel on any terrain: on road, off road, on ice but also on sand dunes," said Lamborghini research and development director Maurizio Reggiani, suggesting it will be the fastest SUV on the market.
In the battle to capture the attention of wealthy drivers, the new entrant will be up against the likes of Bentley's Bentayga, the Mercedes G-Class and footballers' favourite, the Porsche Cayenne.
Aston Martin, Rolls Royce and Ferrari are all either in the process of or considering joining the high-rev party, despite the reservations of purist fans of those famous brands.
Sales of SUVs and CUVs (cross-over utility vehicles) have increased by 233 percent in the last 10 years, creating a market of 26,47 million units in 2016.
Analysts expect the broader market to expand a further 30 percent by 2020, although the ultra-expensive super SUV sector will represent only a tiny niche part of the increase.
The Lamborghini plant has been redesigned and its capacity doubled with the addition of 500 new staff to meet anticipated demand from one of the auto industry's most dynamic sectors.
In 2016, nearly 21,000 super SUVs were sold, up 346 percent in five years, according to IHS Markit.
Lamborghini made 3,457 sports cards last year and is expecting to sell a similar number of the Urus by 2019. The first models will be registered next year.
By Céline Cornu