The firm will receive prime positioning for its games at the event, as well as branding displayed on pre-show marketing and promotions.
It has been confirmed that Gears of War 3 will be fully playable at the event, several weeks before its worldwide launch.
"We are delighted to show our support for GAMEfest 2011 and to give customers the opportunity to try out some of the new exciting games and entertainment experiences that we're launching this year," said Microsoft's retail and marketing director Stephen McGill.
GAME's UK marketing director Anna-Marie Mason added: "It is fantastic news that Microsoft has agreed to partner with us and be one of our headline sponsors of GAMEfest.
"We have an incredible relationship with Microsoft and I know that our customers will be looking forward to see what they do at the event."
Announced during the Video Game BAFTAs in February, GAMEfest will run from September 16-18 at Birmingham's NEC arena.