The car, which will be based on the Mitsubishi i-MiEV that was launched in Japan in June, will be sold by Peugeot-Citroen .
Peugeot has revealed its version will be called iON and wil go on show at the Frankfurt Motor Show this month.
PSA, the parent company of Peugeot-Citroen, said it expects to sell about 25,000 vehicles a year once the car is launched next year.
The two carmakers had agreed in March to cooperate in developing and marketing electric cars.
Peugeot-Citroen, which will have separately branded versions of the i-MiEV, will start selling the cars in Europe under both brand names by the end of 2010, Mitsubishi Motors said in a statement.
Mitsubishi is making an aggressive push into electric vehicles. The carmaker will begin global sales of the right-hand-drive i-MiEV this year and has plans to expand the rollout of the i-MiEV in left-hand-drive markets in 2010.
PSA said its version of the electric car would enhance its growing range of low-emission vehicles.
PSA will launch its diesel-electric hybrid technology in 2011 on the Peugeot 3008 HYbrid4 and Citroen DS5 HYbrid4. A plug-in diesel hybrid is due in 2012.
PSA and Mitsubishi agreed in March to cooperate in developing and marketing electric cars.