The revelation came after Motherboard found contractors were listening to audio from both Skype and Cortana, including sensitive and personal conversations of Microsoft customers.
"We realised, based on questions raised recently, that we could do a better job specifying that humans sometimes review this content," a Microsoft spokesperson told Motherboard on Wednesday.
"We've updated our privacy statement and product FAQs to add greater clarity and will continue to examine further opportunities to improve," the spokesperson added.
The updated privacy statement says human review is used to help build, train and improve the accuracy of its Artificial Intelligence (AI) systems.
"Our processing of personal data for these purposes includes both automated and manual (human) methods," read Microsoft's privacy policy.
"We manually review short snippets of a small sampling of voice data. We have taken steps to de-identify to improve our speech services, such as recognition and translation," it added.
The Skype Translator's new FAQ read: "This may include transcription of audio recordings by Microsoft employees and vendors, subject to procedures designed to protect users' privacy, including taking steps to de-identify data, requiring non-disclosure agreements with vendors and their employees, and requiring that vendors meet the high privacy standards set out in European law and elsewhere".
The tech giant, however, did not disclose whether it will disband the practice.
According to Motherboard, Microsoft's human review contractors are paid between $12 and $14 an hour for the job, and transcribe up to 200 audio clips every hour.
After Google, Apple and Amazon, Facebook has become the latest tech giant who was paying third-party contractors to transcribe and listen to your conversations on its Messenger app.
Apple, Google and Amazon recently suspended human review of user audio recordings after reports said the companies used third-party contractors to listen users' voice recordings.
While Apple suspended the programme that let its virtual assistant Siri listen to users' recordings for "quality control", Google stopped listening and transcribing Google Assistant recordings in Europe.
( With inputs from IANS )