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Subaru's Third-Generation Boxer Engine – Click above for high-res image

According to Automotive News, Subaru is set to release a new, more fuel-efficient version of its boxer four-cylinder engine. The powerplant should be available in both 2.0-liter and 2.5-liter configurations and will be able to offer up a 10-percent boost in fuel economy over its predecessors. The report doesn't detail exactly how the engine goes about gaining its new found efficiency, but it does say the changes are the first significant revision of the company's boxer architecture in two decade

Last fall Subaru announced plans to introduce a diesel engine with their classic boxer configuration. At next month's Geneva Motor Show, Subaru will be displaying the new oil-burning horizontally opposed four cylinder engine. Subaru plans to install the new engine in the Legacy and Outback starting early in 2008. According to Car magazine the engine is expected to produce about 165hp and 250 lb-ft of torque. The Subaru press release is after the jump.