Improved support for Ajax programming and better security are among the enhancements to the latest version of the browser, according to Microsoft.
Microsoft is also expected to address interoperability criticisms levelled at IE7. The new version is likely to comply more fully with World Wide Web Consortium standards bringing it in line with Mozilla's Firefox.
IE8 is the first major update to the company's browser since the launch of IE7 in October 2006.
No date has been given for the official launch, but Microsoft is likely to take IE8 for a public test drive at the MIX conference in March.
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