The news comes as Microsoft revealed that 18,000 people are to lose their jobs "over the next year", with 12,500 "professional and factory positions" to be lost as it integrates Nokia's mobile arm into the business.
In an email to Microsoft employees, the company's executive in charge of mobile devices, Stephen Elop, said future Nokia X designs and products would be absorbed into the Lumia brand and run on Windows OS.
It's just a month since the latest Nokia X-branded smartphone emerged, with the X2 running on Android and costing just €99 (£80) – a pricing strategy designed to attract the affordable end of the mobile market.
Elop confirmed in his email that Microsoft would continue to "sell and support existing Nokia X products", but said there would be a focus "on driving Lumia volume in the areas where we are already successful".
Microsoft will be consolidating its former Smart Devices and Mobile Phone divisions into a single business covering all aspects of its mobile activities, with a team led by Jo Harlow planning on securing success for its Lumia products.