To be driven by former skiing champion and current Dakar driver Guerlain Chicherit on selected events this year, the Megane RX will make its official debut at the French RX round in September with a full-on championship assault planned for next year.
As well being involved in the car's construction, the 2.0-litre turbocharged engine will also be built by Prodrive although no power figures were released.
"It has long been an ambition of ours to compete in the FIA World Rallycross Championship. It is the fastest growing motorsport series in the world and gives us the opportunity to use all our engineering experience to create a car capable of winning the world title," Prodrive Chairman David Richards was quoted as saying.
Prodrive's involvement comes not long after Audi announced it would head-up defending champion Mattias Ekstrom's EKS RX team, while Volkswagen Motorsport will provide support to the Volkswagen RX Sweden team of Johan Kristofferson and former champion Petter Solberg.
The twelve round 2017 season will kick-off at the Circuit de Catalunya in Spain on April 1-2, before concluding at the inaugural World RX round of South Africa at Killarney in Cape Town on November 11-12.