Audi’s hot new S7 is set to be powered by a new twin-turbo V8 engine, Autocar can reveal.

The new 4.0-litre engine is expected to produce around 550bhp in the S7 when it reaches showrooms next year.

See the undisguised spy pics of the new Audi S7

The engine has been co-developed with Bentley and will also feature in the new Continental GT in 2012; both cars will be all-wheel drive.

The Audi S7, pictured here in these undisguised spy pictures, will get a whole host of styling changes over the standard A7 range it is based on.

Read Autocar's first drive of the new Audi A7

These include larger alloys and brakes, a sportier front bumper with larger air intakes and quad exhaust pipes.

Audi is also planning an even more powerful RS7; this is expected to use an upgraded 580bhp version of the 5.2-litre V10 engine found in the R8 mated to Audi’s new seven-speed dual-clutch transmission.

See all the latest Audi A7 reviews, news and video