The Surface Duo will have two 5.6-inch displays that expand to an 8.3-inch screen.
At an event in New York on Wednesday, Microsoft said that it would release Surface Duo in 2020.
"Surface Duo is the first Surface to fit in your pocket. Surface Duo brings together the best of Microsoft productivity experiences, Android apps and Surface hardware design into a single device you can take anywhere," said the company.
"It has two paper-thin 5.6-inch screens that unfold to 8.3 inches, and just like Surface Neo, it can be used in a variety of modes to let you work the way you'd like," Microsoft added.
Microsoft tried hard to make its Windows-based phones successful, but failed as it could not compete against Google's Android and Apple's iOS.
The Surface Duo will be able to run apps from the Google Play Store.
"With Surface Duo we are building upon Android to marry cutting edge hardware with familiar software and services," said the company.
The company also showcased Surface Neo a dual-screen device built for productivity on Windows 10X, an expression of Windows 10.
A 360-degree full-friction hinge connects two 9-inch screens, enabling Surface Neo to adapt to whatever posture you need in the moment.
"When you open it, you have a full-size 13-inch display in the thinnest LCD in its class. It's built for productivity and multitasking like a true PC would be running full productivity apps, with a removable keyboard and compatibility with Surface Pen and Bluetooth mouse," said Microsoft.
To support Surface Neo, Microsoft is introducing Windows 10X, an expression of Windows 10 designed for a new category of dual-screen PCs.
( With inputs from IANS )