Absolute 80s will be positioned as a pop and rock music station aimed at 30 to 54-year-olds, playing a mix of artists such as Human League, Frankie Goes to Hollywood, Duran Duran, Adam & The Ants and Culture Club in a jukebox format.
The station will initially be available on DAB in London and online nationwide, with the possibility of expanded DAB transmission in other parts of the country later.
The station's revenue will be derived from traditional spot ads as well as sponsorship and promotions.
As part of the changes, Absolute Xtreme will effectively close as a separate brand.
Its programming will fold into that of Dabbl, which Absolute launched last month.
Following the merging of Absolute Xtreme, the currently presenter-free Dabbl will fine-tune its music policy to include new music, live music and tracks from the '90s and Noughties.
Absolute Radio has not ruled out launching further digital stations, with the company noting it is looking at areas not being served.
Clive Dickens, chief operating officer at Absolute Radio, said: "Absolute 80s is a natural extension of the Absolute Radio brand.
"Dabbl has already found a solid audience and we wanted to support that by moving Absolute Xtreme into that offering. We will also be extending Dabbl's availability beyond London into counties such as Essex and Berkshire from December."
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