Google announced AdSense publishers can now create custom ad size units for both text and display ads on their web sites.

Google said, “Custom sized ads behave just like their standard size counterparts, showing a text or display ad depending on which is likely to have the best performance for the impression.”

How does it work? You login to your AdSense console, click on create an ad and then select the custom ad size option. From there you can enter in the width and height in pixels and then let Google do the rest.

Google does warn that:

Google also warns that they may ad padding or other elements to make the ads look normal. Here are some pictures Google shared of what they might look like.

Custom Sized Text Ads:

Custom Sized Display Ads:

Finally, Google has some policies and restrictions around custom ad sizes that include:

Only one dimension can be greater than 300 pixels
The minimum width is 120 pixels
The minimum height is 50 pixels
Neither height nor width can exceed 1200 pixels.

Forum discussion at Google+ & WebmasterWorld.