MSN Music, which had been expected earlier in the year, allows users to download songs and create playlists using over one million tracks in the online music store's catalogue.
The offering covers artists signed to all of the UK's major record labels. Content downloaded from the service is Digital Rights Management (DRM) free, meaning it can be transferred to personal music players, or burnt to CD.
Users can log in using their existing Windows Live ID and also access artist information such as biographies and discographies.
Microsoft also said that free music streaming will also be available on a limited basis.
Downloads can be paid for using credits, which can be purchased in bundles of 10 for £7.99. One credit buys an individual download, making it 79p per track. Alternatively an album can be purchased for the 10 credits.
See also: Microsoft to launch Spotify rival