The engine would save fuel by using compression of fuel and air, rather than a spark, to produce heat required to power the engine. GM is testing the technology in two drivable concept vehicles -- Saturn Aura and Opel Vectra.
GM said it is working to refine the engine before it will be available on the mass market.
"Although our development costs have been substantial, we have made tremendous strides," said Prof. Dr. Uwe Grebe, executive director for GM Powertrain Advanced Engineering."
Additional development costs, including research and testing programs, are required to make the technology ready."
The process ignites a mixture of fuel and air by compressing it in a cylinder, melding characteristics of a diesel and traditional internal combustion engine.
GM has also said it will begin road testing its Chevrolet Volt plug-in hybrid next spring and plans to produce the rechargeable car by late 2010.
Unlike earlier gasoline-electric hybrids, which run on a parallel system twinning battery power and a combustion engine, plug-in cars are designed to allow short trips powered entirely by the electric motor, using a battery that can be charged through an electric socket.
(Reporting by Jui Chakravorty)