The R model is expected to arrive in Australia late next year as both a sedan and a hatch, but the price has yet to be locked in.
A direct-injection 3.6-litre V6 provides the punch for the R36, with 220kW on tap.
It has a six-speed automated DSG manual gearbox that feeds power to the four wheels for best possible traction.
The Passat R36 sedan can blast from zero to 100km/h in 5.6 seconds, close to serious sports car territory. The R36 wagon also doesn't mess about, doing the same sprint in 5.8 seconds.
Both cars have an electronically limited top speed of 250km/h.
Volkswagen has given the Passat's suspension an overhaul, with firmer springs and dampers aimed at giving the R36 sportier handling characteristics.
Also upgraded are the brake discs and calipers in order to provide extra bite.
The new Passat also has some exterior upgrades, including 18-inch alloy rims and low profile rubber.
The R36 runs a body kit with a rear spoiler, side skirts and deep front and rear bumpers.
The front grille has extra chrome and there are two chromed exhaust tips.
Just as all other Passats, the car comes with a high level of standard equipment, but the R36 adds xenon headlights, dual-zone climate control and heated seats.
The Passat is the second model to be given the R treatment, and Volkswagen is considering releasing more models in the R range.
Until now, the Golf has been the only model to be developed as an R car. The R36 will be the most potent model in the Passat range.
Volkswagen has also confirmed there will be no eight-cylinder Passat with the current model. The W8 version of the previous generation Passat, which arrived in Australia in 2004 with a price of $97,900, was not popular.