The new model includes speakers and microphones, as well as artificial intelligence and machine learning features.
Previously a BBC-led project, it is now being led by a foundation that aims to make coding accessible to children.
The device will be released next month, starting at £11.50.
"Micro Bits is designed to help children unlock their creative potential and learn how to shape the world around them," said Gareth Stockdale, chief executive of the Micro Bits Education Foundation.
"Learning to code and think computationally can increase their chances of living in the 21st century."
Since its launch, Micro Bit has been designed for education, with an estimated 25 million children learning computer skills on the device in more than 60 countries.
The previous model was launched in the UK in 2016, with the BBC giving the Micro Bit away for free to seven students each year.
It is now in use in most secondary schools, elementary school, universities and libraries.
Image caption25 LEDs make up a simple display
Keith Quille, a lecturer at Dublin Institute of Technology, says: " The Micro Bit has a low floor and a high ceiling-you can set it up to be advanced, but it can also be very basic." Teacher.
"We teach it at primary and university degree level-because you don't need a lot of other tools to make it work, it's very easy to use."
The foundation also donated 5,000 devices to UK families to help them learn during the coronavirus pandemic.
How it works.
The Micro Bit is a palm-sized circuit board with an array of 25 lights that can be programmed to display letters, numbers and other shapes, as well as a Bluetooth chip for wireless connectivity.
Media captionBBC technical correspondent Rory gets his hands dirty with the Micro Bit
Rather than entering code directly into a computer, owners write scripts in one of four programming languages through a Web-based tool on a PC or an app on a tablet or smartphone.
Once written, the compiled script must be transferred to the Micro Bit, which can then be used as a stand-alone device that can be used to refresh messages and record movements as well as other tasks.
It can also be connected to other electronic devices to form the "brain" of a robot, musical instrument or other kit.
The new model will include a better microprocessor and more memory. A built-in microphone and speaker; and a touch sensor.
The built-in speaker will allow users to compose music and create interactive, motion-sensitive instruments.
The microphone will allow the device to respond to sound - for example, it can create disco lights that will move over time to the music.
Because the hardware is now powerful enough to run machine learning systems, the foundation plans to expand into this area in the future.
"The simplicity of the Micro Bit means it doesn't need any accessories, and now that it has a speaker and microphone, it can do even more," said Lorraine Underwood, author of "Saving the World with the Bit."
"Kids love interactive things, so adding sound will enhance the learning experience."
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