Office is the dominant productivity suite of programs
Open source advocates have questioned Microsoft's commitment to using open document standards in the future.
The computer giant has said it will implement use of the Open Document Format (ODF), "sometime next year".
The Free Software Foundation Europe said: "It's a step in the right direction but we are sceptical about how open Microsoft will be."
The European Commission, which has fined Microsoft for monopolistic practice, welcomed the move.
"The Commission would welcome any step that Microsoft took towards genuine interoperability, more consumer choice and less vendor lock-in," it said.
The Commission added that it would look into whether Microsoft's announcement "leads to better interoperability and allows consumers to process and exchange their documents with the software product of their choice".
Open source software advocates have long criticised the file formats used by Microsoft's Office suite of programs because they are not genuinely interoperable with software from third parties.
Microsoft has said it will add support for ODF when it updates Office 2007 next year.
Georg Greve, president of the Free Software Foundation Europe, said he remained dubious about "how deep" Microsoft's adoption of the standard would go.
"This is definitely a step in the right direction. We have been encouraging Microsoft to support ODF natively for quite a while.
"Like all things, this will depend to some extent on how they do it."
The Open Document Format Alliance said it was sceptical about the extent of Microsoft's commitment.
Marino Marcich, managing director of the ODF Alliance, said: "The proof will be whether and when Microsoft's promised support for ODF is on par with its support for its own formats.
"Governments will be looking for actual results, not promises in press releases."
At the moment, Office users can use ODF documents by using a downloaded "translator" program.
Critics point out
But critics have pointed out that the translator does not integrate very well with parts of the Office suite.
The move by Microsoft follows attempts by the company to have its own standard, the OpenXML format, recognised as interoperable.
The International Standards Organisation approved its use but the full specification of the OpenXML format has yet to be published.
Mr Greve said: "Support for ODF indicates there are problems with OpenXML that Microsoft cannot resolve easily and quickly.
"OpenXML is something all users want to stay away from. It's not clear if it will ever become an interoperable standard and so users should be very careful using it."
Mr Greve said "genuine adoption" of ODF would give consumers more choice.
"People will no longer need to use Microsoft Office in order to interoperate.
"They will no longer need to choose a support platform for Office, i.e. Windows."
He added: "There will be full choice on the desktop; people could switch to Linux and choose Open Office or other applications that support ODF, like Lotus Symphony or Google Docs.
"There is fairly large amount of apps to choose from, which can be based on the merits of the application and their personal preference."