The feature is designed to replace the "you are here" maps found in shopping malls and department stores. It will automatically zoom into an indoors map if you enter a mapped building, and should also change maps as you move between different floors
The phone is said to be in development by HTC, who collaborated with Facebook earlier this year for the Salsa and ChaCha/Status phones, which both had physical Facebook buttons, and a degree of integration with the social network.
While these rumours have been going around for quite a while, the article contains some new information, and neither Facebook or HTC are denying the rumours.
The phone will be based on Android, but like Amazon's Kindle Fire, will be heavily modified to integrate with Facebook, potentially using Facebook's HTML5 platform.
While we're unlikely to see any official announcements or releases any time soon, Facebook are eager to compete with Google and Apple, and are likely to want a phone of their own on shelves as soon as possible.