The firm also announced another new console, Project Scorpio, which will offer virtual reality and 4K gaming.
It will be released by Christmas 2017 but no details of a price were given.
The Xbox One S, however, will cost $299 (£210) and include support for High Dynamic Range (HDR) gaming, with extra levels of brightness and more colour.
Pictures of the device, which will also include 4K DVD and Blu-Ray playback, were leaked ahead of E3.
One analyst said many gamers might not be ready to buy a new console so soon after the Xbox One's release.