Mercedes performance division AMG has just announced its new biturbo V8 engine, making 536-hp and 590 ft-lbs of torque (563-hp and 664 ft-lbs of torque with the AMG Performance Package). Designed to replace the 6.2-liter AMG mill, the M157 engine will first appear in the 2011 S63, where it will also make a decent 22.4 mpg and carry the luxurious beast to 60 mph in just 4.3 seconds. Top speed for the new S63 will be rated at 186 mph when equipped with the AMG performance package. After, Mercedes will begin to use the engine in all of its AMG 63 models, including in the SLS, where it is expected to get even more power.

In the S63, the new V8 Biturbo will use Mercedes’ AMG SPEEDSHIFT MCT 7-speed sports transmission, which first debuted on the SL63. In “M” Manual mode, it will not automatically downshift or upshift, even at redline, to give the drive optimum control.

Torque for the new engine is available at very low revs, with 494 ft-lbs on ta at just 1500 rpm, while 590 ft-lbs are delivered at 2400 rpm. As for the AMG Performance Package models, 645 ft-lbs comes on at 2000 rpm, while 664 ft-lbs starts at 2500 rpm.

Engine highlights include direct-injection with piezo electric injectors and the use of a start/stop system to conserve fuel while the car isn’t in motion in a new Controlled Efficiency mode.

To help showcase the new engine Mercedes has commissioned a special S63 AMG showcar, designed after the 300 SEL 6.8 AMG, which took a class victory and second place overall at the 24-hour race in Spa-Francorchamps in 1971.