The PAL-V is a gyrocopter that can fly as far as 500 kilometres (315 miles) at an altitude of up to 4,000 feet (1,200 metres).
When it lands, it tucks away its rotor-blades and turns into a road-legal three-wheeled vehicle with a range of 1,200 kilometres.
"In future, you will be able to drive from home to the airport, take off, land and then drive to your destination in one go," said Robert Dingemanse, chief executive of the company, also called PAL-V.
In development since 2008, the first commercial models of the arrow-shaped PAL-V are expected to go on sale in 2014 at 250,000-300,000 euros ($330,000-$400,000), Dingemanse told AFP.
"The successful maiden flight of the PAL-V protoype was conducted at a Dutch Air Force base last month," added the head of the company, based in Raamsdonksveer near the eastern city of Nijmegen.
"It will revolutionise the era of personal air travel," said Jacco Hoekstra, dean of the aerospace faculty at Delft Technical University, which with the Dutch National Aerospace Laboratory cooperated on the project.
"Before, air travel was mainly based on public transport," Hoekstra said. "Now it will become a lot more personal -- you will simply be able to walk out your door, drive to a small airfield and fly away."
If the PAL-V sounds like the perfect getaway vehicle from a traffic jam, there is a hitch -- it requires 165 metres of runway to take off, 30 metres to land and can only be flown from airports.
For more than a century inventors have been trying to combine cars and planes, and several companies have joined the race to make the first commercially-produced "flying car."
US-based firm Terrafugia said Monday they had successfully tested their own street-legal plane called the the "Transition."