The well-established Fresnel diffraction occurs as an opaque object partially obstructs the passage of a coherent beam of light. In this process, the amplitude of the optical wave experiences a discontinuous change that leads to peculiar bright and dark fringes near the ray optics border of the beam. The fringe pattern varies very slowly by distance from the object and away from the beam border the diffraction effect is negligible. These behaviors have limited the applications of the conventional Fresnel diffraction very severely. In this article, we introduce a new kind of Fresnel diffraction that occurs due to discontinuous change in phase or phase gradient, in a part of a coherent beam of light. The change splits the beam into two diffracting wavefronts with common border that interfere with each other. In this kind of diffraction, the fringes may appear in the central part of the beam and their locations and visibilities are very sensitive to the phase change. Therefore, the researchers have utilized the effect in the measurements of different physical quantities, with high accuracy, using modest equipment. In this article, we use the Fresnel diffraction from the semi-infinite opaque screen (knife-edge) as the building block to describe the introduced effect, diffraction from the phase steps, and discuss its different aspects. We simulate the implied diffraction patterns, investigate the patterns by experiments, elaborate on the unique features of the effect, and present some interesting applications.