The company also announced that President Sue Decker, who had been a candidate for the CEO position, has resigned and will leave the company after a transitional period. Decker worked at Yahoo for eight-and-a-half years and was a close supporter of Yang.

In a statement, Yahoo Chairman Roy Bostock said Bartz has the right mix of technology and business savvy to lead Yahoo, as well as a strong leadership style and a proven track record of driving growth, shareholder value and operational excellence.

"She is admired in the Valley as well as on Wall Street for her deep management expertise, strong customer orientation, excellent people skills, and firm understanding of the challenges facing our industry," Bostock said.

In the same statement, Bartz praised Yahoo for its assets, technology, staff and accomplishments. "There is no denying that Yahoo has faced enormous challenges over the last year, but I believe there is now an extraordinary opportunity to create value for our shareholders and new possibilities for our customers, partners and employees. We will seize that opportunity," she said.

Yang also praised Bartz, calling her "the ideal person" to drive Yahoo forward. "I believe Yahoo's best years are still ahead of it," he said in the statement.