Elop, who was thought to be in strong contention for the CEO position at Redmond before losing out to the eventual choice Satya Nadella, will still be given a pretty substantial remit within the new Microsoft.
The somewhat major news comes via the current leader of the division Julie Larson-Green, who is moving on to a new position within the Applications and Services Group.
In good hands?
In an email sent out to her team, obtained by Geekwire, Ms. Larson-Green wrote: "I'll remain in role leading the DnS organisation in the interim until the Nokia deal closes and Stephen Elop makes his transition to Microsoft. We've been meeting regularly throughout and are making a lot of progress, ensuring our teams are ready for the Day 1 close and beyond.
"You are all in great hands with Stephen and already we've shared a lot with him and his LT from Nokia regarding all of the fantastic people, teams and products in DnS. I also know many of you are looking forward to welcoming the Nokia team and working more closely with them."
The as-yet-unconfirmed appointment puts Elop right in the centre of the action at Microsoft as head of, arguably, the company's most important division going forward.
Initially, there is sure to be some scepticism regarding Elop in charge of Xbox given that last year it was rumoured he planned to sell the gaming division if he became CEO.
Of course, we await official word from Microsoft on the scope of Elop's new role. We've reached out to the company for comment and will update this story if and when a response is forthcoming.
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A technology journalist, writer and videographer of many magazines and websites including T3, Gadget Magazine and TechRadar.com. He specializes in applications for smartphones, tablets and handheld devices, with bylines also at The Guardian, WIRED, Trusted Reviews and Wareable. Chris is also the podcast host for The Liverpool Way. As well as tech and football, Chris is a pop-punk fan and enjoys the art of wrasslin'.