Beginning June 9, in all markets where Xbox One is sold, the company will offer Xbox One without Kinect starting at $399 USD / £349 GBP, down from the original RRP of $499 USD / £425 GBP.
Until now, Microsoft had consistently denied suggestions that it would one day release a Kinect-free Xbox One console by labelling the motion sensing device "an absolutely integral part of the experience".
Breaking the news on Xbox.com on Tuesday, department head Phil Spencer insisted that, despite the major policy reversal, the motion sensor remains an important part of Microsoft's vision for Xbox One.
"To be clear, as we introduce this new Xbox One console option, Kinect remains an important part of our vision," he said.
"Many of you are using Kinect for Xbox One every day. In fact, more than 80 percent of you are actively using Kinect, with an average of 120 voice commands per month on each console.
"We will continue to offer a premium Xbox One with Kinect bundle to deliver voice and gesture controls, biometric sign-in, instant personalization, instant scanning of QR codes, and enhanced features only available with Kinect in games such as Kinect Sports Rivals, Just Dance 2014, Project Spark and more."
Spencer confirmed that Microsoft will offer standalone Kinect packages at retail.
The announcement marks the latest in a long line of policy reversals from Microsoft's Xbox One team, most notable of which was the decision to ditch plans for the console to require an internet connection.
Microsoft's original plans for Xbox One positioned Kinect as a mandatory requirement for the console to even function, before the company reversed the policy ahead of the system's November 2013 release.
However, despite allowing console owners to unplug the sensor, Microsoft stood firm on including the peripheral with every Xbox One sold. Xbox head Spencer claimed as recently as April that dropping Kinect wasn't top of consumers' Xbox One wishlist.
"We're always trying to match what consumers are asking for," he told Edge.
"I always want to make sure that we're in tune with what current or potential customers are asking for from us. Right now, [dropping Kinect is] not the number one request from people.
"Usually it's, 'Where are the great games?' There are a number of games on the ID@Xbox programme that use Kinect, and you'll see more games in the fall."