Air Canada said Tuesday that Rouge will fly to Venice, Italy, and Edinburgh, Scotland, two destinations that currently aren't served by Air Canada.
The new airline will also serve Athens and other European destinations and the Caribbean from Montreal and Toronto.
The discount carrier will begin operations with two Boeing 767-300ER and two Airbus A319 aircraft that will be released from Air Canada's mainline fleet.
Additional planes will be added as Air Canada starts to take delivery of new Boeing 787 Dreamliner aircraft in 2014, ramping up to 50 planes.
Air Canada is Canada's largest domestic and international airline and the 15th largest airline in the world, serving more than 33 million passengers last year.