The device will sport a health-tracking features and work with multiple mobile platforms, Forbes reports.
Microsoft feels the time is right to enter the smartwatch sector, according to a Forbes report.
The tech giant is expected to launch a smartwatch in the next couple of weeks that will have health-tracking capabilities, including a heart-rate monitor, according to the report, which cited unidentified sources.
The device will reportedly be capable of syncing with devices running several mobile platforms, such as Apple's iOS and Google's Android operating systems, and last more than two days with regular use. The gadget is expected to be available to consumers by the end of the year, in time for the holiday shopping season.
Microsoft has been linked to current smartwatch efforts as far back as April 2013, when the company was reportedly shopping around suppliers in Asia for components to build a potential touch-enabled watch device. Reports earlier this year indicated that the device would physically resemble Samsung's Gear Fit with a full-color touch screen viewable on the inside of your wrist.
Microsoft has dabbled in the sector before, marketing devices running its once-hyped Smart Personal Objects Technology (SPOT). After pouring a lot of money into the effort and partnering with watchmakers such as Fossil, Suunto, and Swatch on high-end, touch-screen models that cost as much as $800, Microsoft pulled the stem out of the project in 2008.
Wearable devices such as smartwatches and smart glasses have commanded a great deal of consumers' attention and manufacturers' imagination in recent months. To differentiate their products from competitors, electronics makers have strived to create devices with varying options. While many smartwatches sport square faces reminiscent of digital watches of the 1970s, Motorola and LG have opted for traditional circular watch faces for greater fashion appeal.
But Microsoft seems to be focused on one of the key selling points that other players in the crowded smartwatch arena have already seized upon: health. Samsung's Gear S -- its sixth smartwatch launch in the past year -- was unveiled in August and includes a heart rate monitor, pedometer, and sleep tracking.
Meanwhile, Samsung rival Apple unveiled the highly anticipated and much-speculated Watch last month. The new smartwatch taps into apps that can track heart rate, calories burned, activity level and certain fitness activities. It also works with other fitness apps, such as Nike+.
Microsoft did not immediately respond to a request for comment on the report.