Expected to be unveiled at the Frankfurt motor show in September, the 1.0-litre version was first mooted when the second-generation i20 was unveiled at the 2013 Paris motor show.
At last year's Paris motor show, Hyundai unveiled two new downsized, turbocharged petrol engines - a 1.0-litre and 1.4-litre. The three-cyclinder 1.0-litre unit has a capacity of 998cc and is based on the Korean firm's existing Kappa MPI engine. The engine features direct injection and a small, single-scroll turbocharger and can be tuned to produce up to 118bhp and 127lb ft.
By comparison, Hyundai's existing 1.0-litre engine, which is available in the smaller i10, produces 65bhp. The smallest-capacity engine in the current i20 line-up is a 74bhp 1.2-litre petrol.
The i20 is currently Hyundai's second best-selling model in the UK, and introducing a frugal new petrol option with more power would help to further broaden its appeal. As well as slotting into the hatchback, it's likely that the new 1.0-litre engine will also find its way into the i20 Coupé, which went on sale in the UK this March.
Contrary to some reports, it's unlikely that these spy pictures show a hotter version of the i20. The brand has recently launched a performance i30 Turbo, and the i20 is considered to be a strong contender for a hotter version badged under the firm's N performance banner, but it's understood that there are no immediate plans to launch such a car.
Interestingly, these spy pictures show a fully camouflaged test mule - a strong step to take if the car is only being used to test a new engine. Camouflage around the front bumper hides some minor styling changes compared with the regular i20, suggesting Hyundai may be set to make some minor changes to the i20's styling as part of an early mid-life facelift.