Ssanyong will build the SUVs with parent company Shanghai Automotive Industry Corporation (SAIC) at a new assembly plant in China.
The 1.8-litre K-series petrol engine already powers the Land Rover Freelander.
Separately, the K-series is being developed to meet Euro IV emissions standards.
Jiang Zhiwei, vice chairman of SAIC and co-president of Ssangyong, said SAIC will import Ssangyong cars before establishing a joint venture plant with Ssangyong in which each holds a 50% stake.
Zhiwei confirmed that SAIC is pushing for a partnership with MG Rover, and would use its engines to power the future Ssangyong model.