The computing giant will close down all of its chatrooms in Europe, the Middle East, Latin America and most of Asia, while others will be drastically altered from October 14.
In areas where Microsoft is not closing services, it will either be introducing subscription-based services or services that are free but moderated 24 hours a day.
There has been growing concern about children and the use of chatrooms following several high-profile cases following children meeting strangers they met online.
In the summer, the disappearance of 12-year-old Shevaun Pennington with a 31-year-old former US Marine Toby Studabaker sparked a major scare and was splashed on front pages around the world.
Studabaker was later arrested and Shevaun returned safely, but others have not been so lucky. In response, the BBC launched its to offer guidance on how to keep children safe while enjoying the web. The campaign was fronted by 'The Kumars at No 42' and 'Goodness Gracious Me' star Meera Syal.
In a statement, Microsoft said: "As part of an overall effort by MSN and Microsoft to provide consumers with a safer, more secure and positive overall online experience, MSN has decided to no longer offer MSN Chat in this market [the UK]."
Microsoft said the change was intended to help protect MSN users from unsolicited information such as spam and to better protect children from inappropriate communication online.
"The increase in abuse of the internet, such as the massive growth of spam and the increase in unsolicited and inappropriate material, particularly with regards to children, has led us to this decision," it added.
The move has been welcomed by children's charities, which have said the move was long overdue.
In the US, Microsoft will introduce new unmoderated chatrooms, which will be credit card subscription only and will come as part of a package with other products.
In Canada, Australia and Japan, there will be 24-hour moderated chatrooms with some unmoderated services offered as subscription only. And in New Zealand and Brazil, there will only be 24-hour moderated chatrooms.
With chatrooms gone in the UK, teenagers and children here will only have access to MSN's free instant messaging service, MSN Messenger.
Instant messaging is more controlled than chatrooms and gives people more control over who they talk to.
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