Funded by the US Department of Defense, the Transition is a four-wheel vehicle, licensed for the road, which transforms into a plane in about 20 seconds and can then fly up to 500 miles.
However, the Terrafugia Transition doesn’t come cheap.
"People tend to smirk when you say you're trying to make a flying car," the Age quoted Carl Dietrich, the Transition's inventor, as saying.
"But we're very serious about producing a flying car and selling it," he said.
Dietrich began developing Transition in 2006 at his company headquarters in Terrafugia, near Woburn, Massachusetts.
The first test flights took place in New York State in 2009 and Dietrich expects to deliver a finished product to his first 10 customers by next year, with production "ramping up" in 2014.
The starting price of Transition is 279,000 dollars (pounds 177,000), which is slightly less than the cheapest conventional two-seater aircraft and about the same as a supercar such as a Ferrari.