Verizon Communications, the No 1 US wireless carrier, said it has agreed to buy the core internet business of Yahoo for $4.48 billion (€42.25 billion), about $350m (€332m) less than the original price.
The deal will combine Yahoo's search, email and messenger assets as well as advertising technology tools with Verizon's AOL unit.
Verizon had been trying to persuade Yahoo to amend the terms of the agreement to reflect the economic damage from two cyber attacks.
The closing of the deal, which was first announced in July, has been delayed as the companies assessed the financial fallout from the breaches that Yahoo disclosed last year.
The companies said they expect the deal to close in the second quarter.
Under the amended terms, Yahoo and Verizon will split cash liabilities related to some government investigations and third-party litigation related to the breaches.
Yahoo will continue to be responsible for liabilities from shareholder lawsuits and Securities and Exchange Commission investigations.
Verizon has been looking to mobile video and advertising for new sources of revenue outside the oversaturated wireless market.