BMW AG confirms Magna Steyr Fahrzeugtechnik will produce a new Mini Sport Activity Vehicle at its plant in Graz, Austria.

Magna will have capacity at its Austrian operations because production of the BMW X3 is shifting to BMW’s plant in Spartanburg, SC, once Magna’s contract to build the cross/utility vehicle runs out in 2010-2011. In announcing in May that it would no longer build the X3 once production of the current generation ends, Magna officials hinted another vehicle was on the way from BMW to fill the void.

Magna also recently ended output of the Chrysler Voyager minivan in Graz.

BMW doesn’t reveal timing for the start of production for the new Mini cross/utility vehicle, but speculation is the launch won’t come before 2010, following introduction of a new version of the convertible model in 2009 and the production phase-out of the current BMW X3. Volume also isn’t revealed, but plans reportedly are to produce about 40,000 of the all-wheel-drive models annually.

BMW says the move to source the new model at Magna allows it to allocate all of its 260,000-unit annual capacity at its Oxford, U.K. plant to Mini’s three core models, the standard Mini, Convertible and Clubman.