Holden Chairman and Managing Director Mike Devereux, who is currently in Detroit for the 2011 North American International Auto Show, said the Epica would be replaced by short-wheel base version of the Epsilon II platform.
Holden spokeswomen Emma Watts confirmed the Epica nameplate would be discontinued and a new model was on the way.
Ms Watts could not confirm, however, exactly where the Epica replacement would be sourced from or what vehicle it would be based on.
What is known is that the vehicle will not be a rebadged version of the Opel Insignia, as its price would be too high to be competitive in the segment.
One possibility is that the new medium Holden could be based on the upcoming 2012 Chevrolet Malibu, which by that time will be a completely redesigned model.
Whatever model is chosen, it is likely it will be sourced from GM DAT (GM Daewoo Auto & Technology) in South Korea, like the Epica.
The new vehicle will almost certainly be offered with a four-cylinder petrol engine, an option currently missing from the range.
The Epica is currently sold with a 2.5-litre inline six-cylinder petrol engine and a 2.0-litre turbo diesel.
Holden managed to sell just 1842 Epicas in 2010, representing just three percent of the sub-$60,000 medium car segment. More than 25,000 examples of the market-leading Toyota Camry were sold in 2010, which accounted for just over 40 percent of the segment.
The Epica has been one of the brand’s most disappointing models since its arrival in 2007.