Yusuf Mehdi, chief marketing and strategy officer for Xbox said the new gaming console, the Xbox One, will be available in China in September.
China's Ministry of Culture together with seven other ministries banned the manufacture and sale of all game consoles in China in 2000.
Now, the Shanghai free-trade zone has opened the Chinese market to companies like Microsoft, allowing foreign firms to manufacture games consoles for sale in China.
Xbox One will be the first game console legally available in China since 2000. The new model will go on sale on September 23, with prices starting at 3,699 yuan (USD 600).
Mehdi said Microsoft is working with China's BesTV New Media, a subsidiary of Shanghai Media Group, to provide Chinese players with the very best games and entertainment experiences.
The Microsoft move comes as it faced anti-monopoly probe.
China's Microsoft unit on Wednesday said it has always abided by laws and regulations in China and will "actively answer" questions raised in an anti-monopoly case.
China's market regulator confirmed an investigation into Microsoft.
Microsoft claims to have a monitoring and implementation mechanism to ensure compliance of its operations in different markets and there is no exception for the Chinese market.
In May, China announced it would ban government use of Windows 8, Microsoft's latest operating system mostly due to suspicions about cloud technology which stores key information elsewhere.

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