ExoMars, as it is called, will use sophisticated imaging to look for signs left behind by flowing water, will analyse soil samples and drill more than three feet below the Martian surface.
In the first trial run of the rover and its instruments ahead of the mission, scientists and engineers at Astrium, the space company that has been building the rover, have been conducting a series of tests in the Atacama.
A team of engineers based in Harwell, near Didcot in Oxfordshire, controlled the rover remotely by sending it commands in a real-life simulation of a Mars mission.
Controllers were required to work on Martian time over the five day tests, downloading data and preparing new commands for a prototype of the rover to perform.
Engineers at the control centre in Harwell. (Mark Woods/Scisys)
The rover prototype itself, named Bridget, used stereo 3D imaging to map its surroundings and ground penetrating radar to probe the geology beneath it.
An imager also studied the surface of the desert just as it will on Mars.
However, one key component of the mission was missing as it has still to be delivered by the Mexican team who are building it the drill.
Instead an engineer who accompanied the rover to the Atacama was forced to use a hand powered drill to burrow down into the desert soil to simulate this part of the mission.
In another bizarre twist, however, engineers had to sweep away tracks left by the rover in the desert with brushes to preserve the appearance of the site.
Jorge Vago, the ExoMars project scientist at ESA, said: "This is the first time when the science instruments and the rover body have come together to conduct pretty realistic field operations.
"The Atacama desert is probably the most Mars like place that you can find on Earth. It is very high up more than 3,000 metres (9,842 feet) in altitude.
Engineers put the final touches to Bridget, the Exomars rover prototype in the Atacama desert (Elie Allouis/Astrium)
So you get a place that is very, very dry, but it has very high doses of UV radiation, so you get interesting chemistry.
"Some of the chemicals that are complicated the life of the current rovers on Mars at the moment you can find in the Atacama Desert.
"It has big boulders on the ground that have been carried their by water and ice a long time ago. We have caught site of signs of what was once clearly flowing water.
"We have zeroed in on those and things have got very interesting. Here we are talking about pretty modern water flows while on Mars they would be a few billion years old."
The £850 million ExoMars rover itself is due to be launched in 2018 and will be landed on the planet's surface using a system similar to Nasa's Curiosity rover that was lowered to the ground using thrusters and a "sky crane".
The six-wheeled ExoMars prototype (Michel van Winnendael/ESA)
Each of the rovers six wheels can "walk" independently like feet, allowing it to overcome obstacles, but engineers in Atacama discovered this can also dislodge rocks that then tip up onto their end and can pose a risk to the vehicle.
They are now planning to include navigation protocols that will help the vehicle avoid such situations when on Mars.
The rover itself will not break any speed records, travelling at just a few feet per minute.
Perched on top of the rover are two cameras, which make it look a little like fictional Disney character Wall-E.
These allow the rover to build up a three dimensional picture of its surroundings, allowing the vehicle it to identify obstacles and plot a safe route through.
The cameras will also allow the rover to identify potentially interesting objects that scientists may want to take a closer look at.
The rover is also is fitted with an autonomous navigation system, developed by SCISYS UK, allowing it to guide itself through the Martian landscape between waypoints sent by the control centre back on Earth.
"This field trial is about optimising the use of typical instruments and equipment aboard a Mars rover and generating a set of commands for the rover to execute the following day," said Michel van Winnendael, who is overseeing the trials for ESA.
"Unlike satellites, planetary rovers operate in close interaction with the topography and physical properties of the planetary surface.
"This implies limited data return from the rover during relatively short communication windows, with an inherent time delay."