Nokia has joined forces with Microsoft in an attempt to regain ground lost to the iPhone and Android-based devices.
The deal will see Nokia use the Windows phone operating system for its smartphones, the company said.
It means that Nokia's existing operating systems will be sidelined.
Speaking at the launch of the partnership, Nokia's chief executive Stephen Elop revealed that there would be "substantial" job losses as a result of the tie-up.
Nokia will remain "first and foremost...a Finnish company. Finland is our home and will remain our home," he said.
But job losses around the world, including in Finland, will be inevitable, he added.
Speaking about the new partnership with Microsoft, Mr Elop said that "the game has changed from a battle of devices to a war of ecosystems".
"An ecosystem with Microsoft and Nokia has unrivalled scale around the globe," he said.
Microsoft's chief executive Steve Ballmer was also present at the launch, underlining the importance of the deal to the computing giant.
"Nokia and Microsoft working together can drive innovation that is at the boundary of hardware, software and services," he said.
Microsoft's Bing will power Nokia's search services, while Nokia Maps would be a core part of Microsoft's mapping services.
The new strategy means Nokia's existing smartphone operating systems will be gradually sidelined.
Symbian, which runs on most of the company's current devices will become a "franchise platform", although the company expects to sell approximately 150 million more Symbian devices in future.
"It is a transition from Symbian to Windows phone as our primary smartphone platform," said Mr Elop.
Windows may not be the exclusive operating system for Nokia tablets though.
"We reserve the right to introduce tablets using other platforms, including ones we may be working on internally," he said.
There was no specific announcement about when the first Windows-powered Nokia phone will be available.
Mr Elop revealed that the firm did consider a tie-up with Google's Android operating system.
"We spent time with our colleagues at Google and explored the Google ecosystem but we felt we would have difficulty differentiating within that ecosystem," he said.
It was also revealed that talks with Microsoft only began in November, illustrating how quickly the deal has been pushed through.
Courtesy:BBC.co.uk
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