The Nook Wi-Fi is available now for $149 online at nook.com and bestbuy.com.
The company is lowering the price for its original Nook, which has both 3G and Wi-Fi, from $259 to $199.
That undercuts the $259 Kindle sold by Amazon.com, Nook's top competitor.
The Nook Wi-Fi will ship this week for online orders and will be available at some Barnes & Noble and Best Buy stores later this month. It will be in all stores later this summer.
Also, Nook users will receive a software update. The update gives all Nooks access to AT&T's national Wi-Fi network, including many restaurants, hotels and other locations.
Another update allows users to jump to a specific page number in an open e-book.
Traditional bookstores have struggled with increased online competition and discounters and have started focusing on the small but quickly growing e-book category.
Barnes & Noble shares roes nearly 3 cents to $17.10 during premarket trading.