The Freedom 251, which was first unveiled by little-known Indian company Ringing Bells in February, will ship from 30 June.
For now at least, the Android handset will be only be available in India and is designed for those on low incomes living in rural areas.
Created as part of the Digital India and Make in India initiatives, the phone will have a staggeringly low price tag of just 251 rupees (£2.77).
The Freedom 251 handset runs the Android Lollipop 5.1 operating system, and is powered by a 1.3 GHz quad-core processor.
It has a 4-inch screen, 1GB of RAM, 8GB of internal memory - which unlike the iPhone is expandable to 32GB using an SD card - and a 3.2 megapixel rear camera.
Those who pre-ordered one of the initial run of 200,000 handsets are due to received them on or shorlty after 30 June.
The company then plans to make a further 200,000 phones a month.
Ringing Bells will be making a loss on each phone, the company claims.
Following the success of low-cost smartphone, Ringing Bells reportedly hopes to launch a budget 32-inch HD television named "Freedom".
The company hopes to sell the TVs for less than 10,000 rupees (£110).
The company has previously faced accusations that the cheap smartphone is a scam, after it allegedly showed off "prototypes" at its launch event that turned out to be phones made by another company with the branding covered.
World`s cheapest smartphone costs £3 & starts shipping to customers this week
28 June 2016
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The world`s cheapest smartphone, which costs less £3, will finally start shipping this week, its maker claims.
