The new Octavia is "a big step into the future" compared to the three generations that preceded it, CEO Bernhard Maier said in a statement.
The car is the first Skoda to receive two new camera-based safety features. Collision Avoidance Assist helps the driver steer away from a potential collision, while Exit Warning alerts drivers if they are about to open their door into the path of a cyclist or another car. The car will also come with adaptive cruise control.
The Octavia will become "one of the safest cars within its segment" Christian Strube, Skoda's head of technical development, said in the statement.
Interior technology on the car includes the option of two 10-inch screens, including a virtual cockpit screen in front of the driver that can be configured to include information from the navigation system.
Skoda has migrated more buttons to the central screen, which sits above the dashboard. Users can pinch-to-zoom the navigation map in and out, while the volume can be controlled with an on-screen slider.
Other available technology includes the 'matrix' LED lights that reduce dazzle to oncoming cars by automatically switching off different zones within the lights, and a three-zone air conditioning system.
The new Octavia is built on the same VW Group MQB platform as the previous model but is 22mm longer in its wagon form at 4689mm and 19mm longer for the hatchback.
Skoda says knee room is "luxurious" in the new model, measuring 78mm in the back seats, while trunk space grows by 30 liters in the wagon to 640 liters, and by 10 liters in the hatchback to 600 liters.
Skoda will launch the wagon first to highlight its popularity over the hatchback, the automaker said.
Deliveries of the first cars in Europe will start toward the end of the year, with the hatch arriving in the first quarter.
The wagon version was Europe's best-selling wagon in the first half of the year, according to figures from JATO Dynamics and it outsells the hatchback by more than 2:1.
The Octavia was the biggest seller in Skoda's range in the first nine months, representing almost 30 percent of overall deliveries at 268,900. The number declined by 9.6 percent, partly because of a tail-off in demand for Skoda models in China, its largest market, according to company figures.
The design of the new car has been given more "emotional appeal" Skoda said. It borrows heavily from the look of the bigger Superb, for example using rear lights that stretch into the trunk lid, rather than just sitting on the body itself as with the current car.
Skoda said the Scout and RS variants will follow later in the year. The PHEV models are expected around the middle of 2020.