On July 13th, 2006 at EA's Summer press event, Gabe Newell announced that a game tentatively titled "Portals" was in production, and that it was due for release alongside Half-Life 2: Episode Two and Team Fortress 2 before the end of the year.
The game is described as a first-person shooter set in the Half-Life universe where you use an "Aperture Science Handheld Portal Device to create dimensional doorways."  The game operates as a puzzle-based shooter, allowing you to create portals that link to one another on any flat surface large enough.
The gameplay is similar to that of [Narbacular Drop|http://www.nuclearmonkeysoftware.com/narbaculardrop.html], an indie game that won the IGF 2006 Student Showcase. Members of the development team that created the game were later hired by Valve.