The campus was inaugurated by Andhra Pradesh Chief Minister Y S Rajasekhar Reddy at Manikonda on the city outskirts on Monday.

Microsoft CEO Steve Ballmer laid the foundation for the second phase of the campus.

The first phase of the complex, inaugurated today, is spread over 28 acres, and will house employees across its three units India Development Center, Global Delivery Center of India and personnel of the sales and marketing division.

Speaking on the occasion, Ballmer, who is on his second visit to India, said the establishment of the new campus underscored the company's commitment to deepen its relationship with India to create new opportunities for customers and the industry.

Microsoft is now running its operations from a rented facility at the Hi-Tec City. It became operational in 1998, and has been playing a key role in developing products and services for a string of strategic areas like .Net platform and Windows and enterprise storage.

The campus inauguration was an extension of Microsoft's commitment to invest $400 million over three years, Ballmer said.

The campus is seen as a culmination of a long-term plan unveiled by Microsoft founder and chief software architect Bill Gates during his visit here in November 2002.