Microsoft is preparing to unveil and release its SkyDrive desktop application for Windows in the coming weeks. That's the word from several sources close to the company's plans, who have revealed that Microsoft has been testing the client for several months. The desktop sync application will let Windows 7 SkyDrive users sync data in a similar way to Windows Live Mesh or Dropbox — providing them with access to 25GB of online storage.

The new SkyDrive desktop application, to be hosted at a new apps.live.com site, will be advertised to existing users of skydrive.com with a new "add computer" option to encourage downloads of the SkyDrive for Windows app. Microsoft will also unveil new pricing options for SkyDrive paid storage plans at the same time, expected to be around $10, $25, or $50 per year for an extra 20GB, 50GB, or 100GB, respectively. We're also hearing that the web version of SkyDrive will receive some minor UI tweaks to accommodate the new changes, in a similar way to the recent updates.

One of the bigger changes at launch will be the reduction of free storage for new users. We understand that Microsoft is debating dropping its free storage of 25GB down to 7GB for new users in May, while keeping existing users at 25GB of online storage. Microsoft is expected to announce some of its plans at The Next Web Conference later this week, where Microsoft is a top partner and SkyDrive is an API partner. Several members of the Windows Live team are expected to be present at The Next Web Conference, where a mystery keynote presentation is pencilled in for Friday April 27th at noon (CET). Timing and pricing is subject to last minute changes, but it appears that Microsoft is ready to battle the imminent release of Google Drive.