In view of the limitations of the traditional Modular Multilevel Converter (MMC) in the prior art, a novel quasi three-level hybrid MMC is proposed in this paper. This novel topology inherits the advantages of the quasi two-level MMC's modularity, easy expansion, common DC bus and high efficiency. Meanwhile, the output voltage levels are increased up to three. Consequently, the harmonics of output voltage are reduced, so the required inductance and capacitance of the output filter can also be reduced. The structure and the operation principles of the proposed topology are presented and investigated in detail and a simulation model is built in order to verify the performance of the proposed topology.