More camera than phone, the Android device has a Leica lens and a 1in, 20-megapixel sensor more often found in Panasonic's dedicated cameras.
The 2.5cm sensor will help the camera take snaps in low light conditions and shoot ultra-high definition video.
Panasonic said the Lumix DMC - CM1 would go on sale towards the end of 2014 in Germany and France.
The phone is expected to cost about 900 euros (£720) when it goes on sale.
It is widely seen as a rival to Samsung's Galaxy K Zoom, which also has a built-in large lens.
The lens and its metal ring, to control aperture and shutter settings, make the CM1 21mm thick - considerably more than contemporary smartphones.
The CM1 also has 11.9cm touchscreen and a dedicated switch that instantly flips it into camera-mode.
Reviewing the gadget at tech news site Pocket-lint, Mike Lowe said it was an "interesting experiment" that "impressed" him more than he had expected.
However, Marc Flores, at Tech Radar, was more critical, saying hybrids satisfied no-one.
"We've tried this before, and it didn't work out so well," he wrote, adding that anyone looking for a good camera should buy a dedicated device.
Anyone keen to take better pictures with a smartphone, he added, should just learn how the professionals did it rather than buy a CM1 and hope that would make all the difference to their snaps.