Nokia, which agreed to sell its hardware business to Microsoft for $7.4 billion last September, will announce a low-cost Android smartphone at the Mobile World Congress conference in Spain later this month, sources told the Journal.
Nokia engineers had been developing the Android phone before Microsoft struck the deal to buy Nokia's handset business and license the Finnish company's patents.
Nokia, once the leader in cellphone sales in emerging markets, was slow to respond to Android's popularity in many countries.
Microsoft, for its part, has had difficulty penetrating those markets because its Windows Phone operating system doesn't perform well on low-cost smartphones.
Although the operating system for the Nokia phone will be Android, the software will not include the Google Play store or many Google services, sources told the Journal; instead, the device will include services created by Microsoft and Nokia as well as an app store by Nokia.
Whether the Nokia Android device would be a one-time offering or if the phone maker would develop more devices powered by Android, created by one of Microsoft's biggest rivals, was unclear, the Journal said.