The company made the announcement during its E3 2012 conference, where it was confirmed that the browsing software will be compatible with Kinect and the newly-announced SmartGlass service.
Users will be able to play embedded videos through voice commands, and use their tablets and smartphones to navigate pages via the SmartGlass app.
Microsoft claims that the software will revolutionise internet surfing in the living room, with its ground-breaking interface and optimised layout.
The company also announced plans to break into the music streaming sector with Xbox Music, and introduce 35 entertainment providers to Xbox Live.
Last month, it was reported that Google's Chrome had overtaken Internet Explorer as the world's most popular internet browser.
> Read our live blog of Microsoft's E3 2012 conference