A wider release of the Microsoft Security Essentials (MSE) software, code-named Morro, is to be made available later this year to all licensed Windows users, according to the Financial Times.
Microsoft says the number of consumers that are signing up to the subscriptions for paid anti-virus has been flat and roughly half have no up-to-date security software.
The MSE software will tackle viruses, spyware, rootkits and Trojans to compete with other free security software from AVG Technologies and Panda Software.
The software is aimed at protecting computer users in the developing world, which are being increasingly infected with malware through legitimate websites, Microsoft said.
The software firm will not bundle the program with Windows 7 or other products to avoid the antitrust charges that resulted from bundling its media player and internet browser with Windows.
MSE succeeds the subscription-based OneCare service, which Microsoft has said it will discontinue when the full version of MSE is released before the end of the year.