Microsoft is to stop developing Android-powered smartphones beyond those already available, the BBC understands.
Nokia X models will now become part of the Lumia range and run the Windows Phone operating system, although existing Android handsets will continue to be supported.
The move comes as Microsoft announced 18,000 job cuts across its workforce.
The tech firm acquired Nokia’s handset division earlier this year.
Nokia unveiled its first family of Android phones at the Mobile World Conference in Barcelona in February.
The release of the smartphones, which were priced at the lower end of the market, was described as a “perplexing strategic move” at the time, given that Microsoft had its own mobile operating system, Windows Phone.
In an email to employees on Thursday, Stephen Elop, Microsoft’s executive in charge of mobile devices, announced that Android handsets were being phased out.
“In the near term, we plan to drive Windows Phone volume by targeting the more affordable smartphone segments, which are the fastest-growing segments of the market, with Lumia.
“In addition to the portfolio already planned, we plan to deliver additional lower-cost Lumia devices by shifting select future Nokia X designs and products to Windows Phone devices.
“We expect to make this shift immediately while continuing to sell and support existing Nokia X products.”
Ben Wood, an analyst at CCS Insight, told the BBC the move was designed to drive sales of Microsoft’s Lumia range, which has lagged behind handsets from competitors such as Apple and Samsung.
“Everybody was scratching their heads when the Android phones were unveiled in February,” he said, adding that the decision had been made before Microsoft’s takeover of Nokia.
However, Mr Wood said, phasing out the Android devices was a strategic decision, designed to “take the work Microsoft have done on the hardware [of Nokia X models] and drive the Lumia price points to much lower levels”.