The firm's new backers are US bank JP Morgan Chase, Tokyo-based investment fund Phoenix Capital, and other Mitsubishi Group companies.
Mitsubishi said it would use the cash to fund an overhaul aimed at returning it to profitability next year.
The restructuring exercise will involve the loss of some 11,000 jobs, 22% of its global workforce.
Mitsubishi said it would also close manufacturing plants in Japan and Australia, and "adjust" its production in the US. Mitsubishi chief executive Yoichiro Okazaki said the firm faced collapse if the restructuring measures did not work. "This is our last chance for survival as an auto maker," he told a news conference.
Details of the rescue package came as the firm unveiled a net loss of 215bn yen (£1.06bn) for the year to March, sharply higher than the 72bn yen it forecast in February.
Simultaneously operating results turned negative in fiscal 2003 with the company recording an operating loss of 96.9 billion yen (£498m) compared to an operating profit of 84 billion yen the year before. While MMC saw its European operations turn positive for the first time ever, the overall negative result comes on the back of the drop in US unit sales, which was further compounded by higher incentive costs and high credit loss provisions taken by the company's US captive financing unit Mitsubishi Motors Credit of America, Inc. (MMCA). The figure partly reflects a disastrous performance from Mitsubishi's US car finance division, which handed out cheap loans in an effort to boost sales, but then found that many customers were unable to make their repayments.
The company also had to fund recall programmes at its truck division after discovering that some vehicles had design flaws that may have caused fatal accidents. The episode has caused grave damage to Mitsubishi's public image.
Analysts warned that turning Mitsubishi around would be no easy task. "This is a car company with a terrible reputation in terms of quality, and it lacks a coherent strategy," said Marc Desmidt at Merrill Lynch Investment Managers. "It remains to be seen if they can put one together."
Under the rescue deal, Mitsubishi will issue shares worth 170 billion yen to JP Morgan and Phoenix Capital. Other Mitsubishi group companies will buy a further 140bn yen of stock, while banks belonging to the Mitsubishi Tokyo Financial Group will swap about 130bn yen of the carmaker's debt for shares.