The deal with Apollo Global Management also includes the entire Verizon Media unit, including the advertising tech operations of the two brands.
Verizon will retain a 10 percent stake in the company, which will continue to be led by chief executive Guru Gowrappan, the company said in a statement.
Verizon acquired Yahoo in 2017 for some $4.5 billion, ending the run for one of the storied brands of the early internet. It merged Yahoo into its division with AOL, another star of the early internet era, which Verizon acquired in 2015.
Both AOL and Yahoo lost traction -- and lofty market valuations -- as internet users shifted to newer platforms such as Google and Facebook.
"We are thrilled to help unlock the tremendous potential of Yahoo and its unparalleled collection of brands," said Reed Rayman, private equity partner at Apollo.
"We have enormous respect and admiration for the great work and progress that the entire organization has made over the last several years, and we look forward to working with Guru, his talented team, and our partners at Verizon to accelerate Yahoo's growth in its next chapter."
Apollo's David Sambur added, "We are big believers in the growth prospects of Yahoo and the macro tailwinds driving growth in digital media, advertising technology and consumer internet platforms."
