Called the "iPad", the device is Apple's biggest product launch since the iPhone three years ago, and arguably rivals the smartphone as the most anticipated in Apple's history.
After months of feverish speculation on the internet and among investors, Jobs took the stage at a jam-packed theatre and began detailing the device's basic features.
The iPad has a near life-sized touch keyboard and supports Web browsing. It comes with a built-in calendar and address book, Jobs said.
Technology enthusiasts had expected to see the sleek, full-colour, 10-inch gadget with a touchscreen interface and wireless connectivity, designed for playing all sorts of media from videos to games to electronic books and newspapers.
Presenting the iBook store, Jobs told the audience: "It looks like a bookshelf and there's a button to a store. It's an iBook Store to allow you to discover, purchase, and download e-books right on your iPad."
Despite the buzz surrounding the launch and Apple's storied golden touch on consumer electronics, the tablet is not necessarily an easy sell, analysts say.
Consumer appetite for a gadget that sits somewhere between a smartphone and a laptop has yet to be proven, though plenty of devices such as Amazon's Kindle e-reader are vying for that market.
As iPod sales wane, Apple is looking for another growth engine and hopes to find one in the tablet. But the move is not without risk. Consumers have never warmed to tablet computers, despite many previous attempts by other companies.
A 16GB wifi-enabled iPad will set customers back $499, while an iPad with wifi with 3G connectivity will cost $829, Jobs announced.
In an online poll on reuters.com, 37 per cent of more than 1,000 respondents said they would pay $500-$699 for the tablet.
Nearly 30 per cent weren't interested, while 20 per cent said they would pay $700-$899.
A keyboard dock is available for the 0.5 inch-thin device, which weighs only 1.5 pounds and has a battery that lasts 10 hours.