Update was expected to arrive before years end.
Although it was originally expected to launch before 2013 arrives, Microsoft has confirmed that the Windows Phone 7.8 update will launch early next year.
The update will bring several notable features, including the inclusion of Windows 8's Start screen that will allow users to utilize the resizable Live Tiles feature.
Windows Phone 7.8 will also see the number of themes and colors doubling to 20, accompanied by new lockscreen features including the Bing Picture of the Day and a password lock to prevent accidental swiping.
Popular apps such as Angry Birds Space and Angry Birds Star Wars will be included, as will services like Xbox Music and SmartGlass.
The Redmond-based company also confirmed it aims to expand the upcoming OS into more markets by shipping new Windows Phone 7.8 devices globally soon.