Handheld Augmented Reality (AR) is often presented using the magic-lens paradigm in which a magic-lens is a transparent interface. Such transparency is usually implemented by rendering camera captured video on the device’s screen. The transparency quality is limited by the video stream quality which may be affected by: unfocused camera lens, poor lighting conditions and limited video stream resolution. All these factors may reduce the readability of the AR scene. To address quality of rendering and increase scene readability, this paper presents an enhanced virtual transparency solution where segments of the scene are replaced by high definition digital content. The proposed enhanced virtual transparency is demonstrated through the design of a digital magnifying glass which has been implemented on of-the-shelf mobile phone.