The claim is based on figures released by Toyota Europe were local testing has shown that the third-generation Prius will emit just 89 grams of CO2 per kilometre and can travel 100km using only 3.9 litres of petrol.
That fuel consumption figure may only stand until Ford hits the market with its extremely frugal ECOnetic version of the new Fiesta.
Using a combination of the latest generation common rail diesel engine, together with a carefully selected list of features that have been engineered to reduce fuel economy and CO2 emissions, Fiesta ECOnetic has achieved a fuel consumption rating of 3.7L/100km however the CO2 output is higher at 98g/km.
The Toyota figures, revealed at the Geneva motor show, are from the European combined cycle, which, Toyota Australia says, is extremely close to the Australian standard.
Local Toyota officials are confident the new Prius will have the lowest greenhouse and air pollution emissions of any car sold in Australia, making it the highest-ranking car on the Federal Government's Green Vehicle Guide.
Current-generation Prius was the top-ranked vehicle for more than four years with fuel economy of 4.4 litres/100km and CO2 of 106g/km.
Early this year, its CO2 count was pipped by one gram by the Smart ForTwo, a two-seat car with a three-cylinder and a 1.0-litre petrol engine, albeit one that uses premium unleaded fuel.
Toyota defends the current Prius, by saying it is a full-size five-seat car that uses regular unleaded fuel for its 1.5-litre, four-cylinder engine.
The petrol engine in the next-generation Prius grows to 1.8-litres, helping to boost power from the combined petrol-electric Hybrid Synergy Drive system by more than 20 per cent to around 100kW.
Despite the increased output, the European figures represent a 14 per cent improvement in CO2 emissions with fuel consumption lowered by 10 per cent.
The only other petrol car under 100 g/km sold in Europe is another Toyota, the diminutive four-seat iQ.
Cabrio and coupe models of the Smart ForTwo achieve 88g/km with a tiny 800cc diesel engine, but those versions are not sold in Australia.
Toyota Australia's senior executive director sales and marketing David Buttner said the European figures confirm the strong environmental credentials for the next-generation Prius.
"Current Prius customers already know they can drive an environmentally sound car without sacrificing space, comfort or performance," Mr Buttner said.
"The next-generation car takes a further leap forward with an improved Hybrid Synergy Drive system that increases performance at the same time as cutting emissions to levels never before seen in Australia.
In a swipe at the current popularity of diesel cars in Australia, Mr Buttner said it was important to note that none of the five-star top performers in the Green Vehicle Guide are diesel vehicles, even where their fuel consumption is relatively good.
He said the Guide made it clear that the contribution to air pollution by diesel vehicles is generally higher than that of comparative petrol or LPG vehicles.