The game is a follow up to last year's brutal side-scrolling brawler, telling a story of redemption as Shank fights his own dark past as a mob hitman.
It will add a two player survival mode and online co-operative play, the most requested feature missing from the first game.
"Creatively, Shank still has a lot to give," said developer Klei Entertainment's founder, Jamie Cheng. "We took the feedback from the community and ran with it, putting our own flavour on every change."
"For Shank 2, we literally took apart the game and put it back together to push the envelope in combat mechanics, visuals, and 2D animation in games."
Shank 2 will release on Xbox Live Arcade, PlayStation Network and PC in early 2012.
> Digital Spy reviews 'Shank' (Xbox Live, PSN)
Watch the announcement trailer for Shank 2 below: