Kia will unveil a concept version of the sports car at the Frankfurt Motor Show in September and production will start in 2009.
According to Auto Express Kia's design head, Peter Schreyer, is behind the plans. Shreyer was part of the team responsible for the original TT.
Apparently the new model has been codenamed "Project Snowflake"
Kia insiders say that the car will "shock" the world and like the TT it will be front-wheel drive/ It will use an all-new 2.0-litre turbo, which is being developed in conjunction with Hyundai.
This engine will also be available in a hot version of the new Cee'd hatchback.
Recently Kia stunned crowds at the Geneva Motor Show with a stunning drop-top version of the Cee'd.
Galleries
Cee'd hatch
C'eed cabrio