The tech giant says users will need just a Wi-Fi connection to stream games onto devices like TVs, laptops and phones, using a controller of their choice.
Stadia was announced at an event in San Francisco during the Game Developers Conference hosted by former Sony and Xbox executive and current Google gaming boss Phil Harrison.
"To build Stadia, we've thought deeply about what it means to be a gamer and worked to converge two distinct worlds: people who play video games and people who love watching them," says Harrison.
"In a world where there are more than 200 million people watching game-related content daily on YouTube, Stadia makes many of those games playable with the press of a button. If you watch one of your favorite creators playing Assassin's Creed Odyssey, simply click the 'play now' button. Seconds later, you'll be running around ancient Greece in your own game/on your own adventure - no downloads, no updates, no patches and no installs."
Google says its goal is to make games available on Stadia in resolutions up to 4K and 60 frames per second, with HDR and surround sound. However, Google has not announced how fast a user's internet connection must be in order to enjoy the high performance Stadia is boasting.
At the presentation, further tech specs were shown off, including a massive 10.7 GPU teraflops - versus the PlayStation 4 Pro's 4.2 and Xbox One X's 6.0.
While gamers can use other controllers or a mouse and keyboard with Stadia, Google has also developed a Stadia controller.
Harrison says the controller itself has a direct connection to Google's data centre through Wi-Fi.
"The controller also includes a button for instant capture, saving and sharing gameplay in up to 4K of stunning resolution. And it comes equipped with a Google Assistant button and built-in microphone."
Stadia will launch later this year, first in the US, Canada, the UK and Europe. How much it will cost and what games will be available at launch will be announced at a later date.