Microsoft on Wednesday announced the sale of its entry-level feature phone assets to Foxconn subsidiary FIH Mobile Ltd. And HMD Global, Oy for $350 million.

As part of the deal, Microsoft said it will transfer “substantially all” of its feature phone assets, including brands, software and services, care network and other assets, customer contracts and critical supply agreements to FIH Mobile and HMD Global.

FIH Mobile will also acquire Microsoft Mobile Vietnam, the company's manufacturing facility located in Hanoi. Microsoft said approximately 4,500 of its employees will have the opportunity to transfer to FIH Mobile or HMD Global at the close of the deal.

The move follows a rough third fiscal quarter for the company's device business, which included a 46 percent drop in phone revenue.

The dip didn't come as too much of a surprise, as the company's mobile phone business has been struggling for some time, but appears to have been the final straw for Microsoft.

During Microsoft's earnings call, executives said Lumia sales had been week in the quarter and said they expected continued year-over-year revenue declines in its phone business. At the time, executive vice president Amy Hood said the company was planning to “work through its Lumia channel position,” but didn't give any specifics on what was to come.

Despite the sale, Microsoft on Wednesday said it will continue to develop Windows 10 Mobile and support Lumia phones such as the Lumia 650, Lumia 950 and Lumia 950 XL, and phones from OEM partners like Acer, Alcatel, HP, Trinity and VAIO.

Microsoft stocks were down a slight .38 percent in pre-market trading Wednesday morning.