The software giant reportedly signed a deal on Friday to build the facility in the Irkutsk region of Russia.
The plans were announced by Birger Steen, chief executive at Microsoft Russia, and Andrei Gubov, an aide to Irkutsk's governor.
Russian paper Kommersant said that the data centre would require 50MW of power per year, and that Microsoft chose the region for its stable and low-cost power supplies.
The cost of the data centre is unknown, but Steen said that a similar centre in Ireland with 100,000 servers had cost around US$500 million.
No details were given as to who would staff the data centre, in a state where the temperature can drop below minus 50 degrees centigrade in winter.
Irkutsk has traditionally been a place of exile in Russia, used by the czars and communists for over 200 years. At one stage the exiled artists, officers and nobles accounted for a third of the entire Russian population.
Microsoft sends staff to Siberia
By Iain Thomson on Nov 27, 2007 7:00AM