The apps will be delivered to subscribers via internet streaming technology when they log into their accounts on the Office 2013 website, and will disappear once closed down.
"What if you could use all the powerful features of the Office applications without doing an install at all?" said Microsoft lead programme manager Paul Barr. "Wouldn't that be the ultimate 'installation experience'?"
Microsoft already offers access to web-based versions of Word, Excel and PowerPoint through its Office 365 subscription package, but the new service provides fully-fledged versions of each programme within a minute.
The computing giant unveiled Office 2013 last month, confirming that the software will feature deep SkyDrive integration, expanded social features and full touch-screen optimisation.
Office on Demand will be available when Office 2013 launches, though an official release date is yet to be set.
Watch a video introducing Microsoft Office 2013 below: