Microsoft's Stephen Elop unveiled the Lumia 640 and 640 XL at the company's Mobile World Congress keynote, promising both will launch in April.
Both will initially ship with Windows Phone 8.1, though Elop promised they will be upgraded to Windows 10, come the OS release later this year.
Windows 10 was unveiled by Microsoft in October and is designed to bridge the gap between the firm's desktop and mobile operating systems, giving developers a single "Universal Apps" platform to work on.
Microsoft released a technical preview of Windows 10 for mobile in February for select Lumia devices.
Elop said he expects the Lumia 640's future Windows 10 update and low cost to prove a key selling point for business users.
"We at Microsoft are on a journey to empower every organisation to achieve more. The Lumia 640 builds on the success we've developed in the affordable space and continues our move to create a unified experience," he said.
"Windows is our home where you will experience the best of what Microsoft has to offer. It's where you have skype, outlook, OneDrive and Cortana. This is a practical approach which puts our customers first. We're pursuing this ambition with Windows 10.
"It also has universal apps, so developers can code one and deploy to all devices. For developers this means a unified platform."
The Lumia 640 features a 5in HD IPS display, quad-core Qualcomm Snapdragon 400 1.3GHz processor, single and dual SIM and 4G options and "advanced" 8MP rear camera with dynamic flash, auto HDR.
The 3G Lumia 640 will cost €139, while the 4G will cost €159.
The supersized Lumia 640 XL features upgraded internal components. Key changes include a larger 5.7in HD IPS display and 3,000mAh battery and higher resolution 13MP rear camera.
The 3G Lumia 640 XL will cost €189 while the 4G model will cost a more expensive.€219 4G
As an added perk to entice business users, Microsoft will offer both the Lumia 640 and Lumia 640 XL with a one year subscription to Office 365.
Elop said he expects the free subscription to increase Windows Phones enterprise market share.
"They have Microsoft services built in for work and works fully with most businesses' environments" he said.
"They offer enterprise security and seamless integration with enterprise IT and management services. The affordable pricing lets you get three Lumia 640s or 640 XLs for one competing flagship with copy cat business services.
Elop added the Lumia 640 and 640 XL will be a precursor for a mysterious "flagship Windows 10 device", promising the top end handset will follow its release at an unspecified point this year.
Microsoft is one of many companies currently trying to dominate the enterprise handset market. Google unveiled its Android for Work mobile solution earlier in February.
Check back with V3 later for a hands on look at the Microsoft Lumia 640 and Lumia 640 XL.
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