The tech giant, whose stock has been pummeled recently, said the fourth-generation iPad would have 128 gigabytes (GB) of storage capacity - twice the size of the current model - plus Wi-Fi and Cellular versions.
With the new device, Apple effectively confirmed rumors that have circulated for months about a new iPad. The latest tablet will be available as of February in Apple's retail stores, and comes three months after the company launched a mini version of the iPad.
Users will have to pay a pretty penny for the latest issue:the Wi-Fi model will cost $799, while the cellular model will cost $929.
Apple watchers, however, note that an upgraded fourth generation iPad - which first came to market last fall - is a shot across the bow at traditional computer makers.
Computer makers have seen a deep slump in PC sales as consumers flock to the relative convenience and portability of tablets. A larger iPad could target corporate PC users, as well as fill a niche among higher-end buyers always in search of the latest upgrade, regardless of price.
The iPad is one of Apple's most popular devices, with sales of about 120 million worldwide.
Still, the company is being dogged by doubts about its ability to invent new products, rather than upgrading its existing line of devices. Analysts have begun to question whether Apple still possesses its a "cool" factor that has made its smartphones and tablets a must-have for technology users everywhere.
(Read More: In Asia's Trend-Setting Cities, iPhone Fatigue Sets In )
The announcement also came just one day before Research in Motion is scheduled to lift the curtain on a new BlackBerry it hopes will revive its flagging fortunes. It led to some speculation that Apple's iPad announcement may, at a marginal level, been an attempt to one-up RIM just before its big reveal.
"It makes sense that Apple would want to come in an pick upon a bit of that news bandwidth," said Dan Ackerman, CNET.com's Senior Editor, on CNBC Tuesday. (Read more: Sink or Swim Time for RIM as BlackBerry 10 Launch Looms .)
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image: © Daniel Dudek-Corrigan