The book, 137 pages in its English version, is titled The Infancy Narratives – Jesus of Nazareth and will be published around the world in some 20 languages. It goes on sale on Wednesday.
It is bound to be another international bestseller like the previous volumes. The Vatican said a million copies had already been printed and more runs were expected soon.
Divided into a forward, four chapters and an epilogue, it traces and analyses the gospel narratives from the birth of Jesus to his presentation in the temple at the age of 12.
The previous two volumes dealt with the adult life of Jesus and his public ministry.
One section of the book is called "Virgin Birth – Myth or Historical Truth?"
The church teaches that Jesus is the son of God and was not conceived through sexual intercourse but by the power of the Holy Spirit, one part of the divine trinity.
In simple language that is at once academic but still easily accessible to a non-specialist readership, Benedict says the story of the virgin birth is not just a reworking of earlier Greek or Egyptian legends and archetypal concepts but something totally new in history.
"It is God's creative word alone that brings about something new. Jesus, born of Mary is fully man and fully God, without confusion and without separation … " he writes.
"The accounts of Matthew and Luke are not myths taken a stage further. They are firmly rooted, in terms of their basic conception, in the biblical tradition of God the Creator and Redeemer," he writes.
"Is what we profess in the Creed (a Christian prayer that includes belief in the virgin birth) true? he asks. He answers: "The answer is an unequivocal yes".
'Cornerstones of faith'
Catholics should see belief in the virgin birth and the resurrection of Jesus from the dead as "cornerstones of faith" because they are undeniable signs of God's creative power.
"If God does not also have power over matter, then he simply is not God," Benedict writes. "But he does have this power, and through the conception and resurrection of Jesus Christ he has ushered in a new creation."
Benedict tackles the "question of interpreted history," or the attempt by the gospels to understand events after they took place in the context of the word of God and their relationship to prophesies in the Old Testament.
"Hence the aim [of the evangelists] was not to produce an exhaustive account, but a record of what seemed important for the nascent faith community in the light of the word. The infancy narratives are interpreted history, condensed and written down in accordance with the interpretation," he writes.
In other sections of the book Benedict discusses the genealogy of Jesus, the figure of St Joseph, the story of the wise men who the Bible says paid tribute to the infant Jesus in the manger in Bethlehem.
He writes of the symbolism of Jesus having been born in a manger: "From the moment of his birth, he belongs outside the realm of what is important and powerful in worldly terms."
The pope dedicates a section of the book to the Bible story of the three kings who paid tribute to the infant Jesus.
Benedict says that while he believes in the story of the adoration of the Magi, no foundation of faith would be shaken if turned out to be an invention based on a theological idea.
In his two previous volumes on the life of Jesus, issued in 2007 and 2011, Benedict condemned violence committed in God's name and exonerated Jews of responsibility for the death of Jesus. – Reuters