So is this a basement window? How is it "set into the foundation"? And what kind of foundation are we talking? Poured concrete? Concrete block?
Without seeing a picture, I can't say what you'll need to do to get the old window out. I suspect they might have essentially set it in place, then mortared around it. I that's the case, it should be fairly easy to break up the mortar & remove the steel frame.
From that point, if it was mine, I think I'd build a frame out of either green-treat or cedar 2x8s, install it in the opening, then install the window.
Again, without more information, I don't know what you're looking at regarding sizes, etc.