The new device will be four times more powerful than the existing Xbox One X.
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Microsoft has confirmed its next Xbox console will launch at the end of next year, claiming it is the “most powerful and highest-performing console” the company has ever made.
The video games giant revealed the new device, currently known as Project Scarlett, will be released alongside a new game from its popular Halo franchise.
The firm’s new streaming service – Project xCloud – will also begin to launch in October, starting with a preview which will allow players to stream games from an Xbox One console to a mobile device, enabling them to play on the move.
Xbox’s announcements came during an event in Los Angeles, ahead of the opening of E3, the video games convention, on Tuesday.
Speaking on stage, Xbox boss Phil Spencer said Project Scarlett and Project xCloud were the “foundation of our future in console and the formation of our future in cloud”.
Mr Spencer added that the new console would be four times more powerful than the current generation Xbox One X.
The company also revealed Halo Infinite, a new game from the first-person shooter series, would be the first launch title for Project Scarlett.
Rival console makers Sony are also reportedly preparing to announce their next PlayStation console but they are not exhibiting at E3 this year.
Microsoft also used the event to preview dozens of upcoming games, with Hollywood actor Keanu Reeves making an appearance on stage to discuss futuristic first-person action game Cyberpunk 2077, in which he will star and which is due to launch in April 2020.
E3 is one of the world’s largest gaming conventions, with more than 100,000 attendees expected during the four-day event in Los Angeles.
“It’s great to celebrate with our incredible fans and show how we are delivering against our vision to empower gamers to play the games they want, with the friends they want, wherever they want,” Mr Spencer said.
“With thousands of Xbox games in development, we curated our show around our players, with new titles premiering in Xbox Game Pass across console and PC, and game streaming that enables them to play their favourite games, with their friends, wherever they go.”
Martyn Landi is Press Association Technology Correspondent.