Yahoo announced on Tuesday that it closed on the sale of half of its stake in the Alibaba Group of China, giving it $3 billion to return to its shareholders..

Under terms of the deal, Yahoo is receiving about $6.3 billion in cash, $800 million in preferred stock in Alibaba and $550 million as a result of amending the firms' technology and intellectual-property licensing agreement.

Alibaba said it has the right to repurchase half of Yahoo's remaining stake.

In selling about 20 percent of Alibaba’s stock back to the company, Yahoo will reap about $7.6 billion before taxes. The $3 billion represents about 85 percent of the net cash proceeds from the sale, with Yahoo also receiving preferred shares in its partner.

The deal was struck in May of this year after many years of contentious relationship between the two companies.

The relationship began when Yahoo bought a 40 percent stake in Alibaba in late 2005. But as Yahoo’s stock slid, Alibaba’s rose, causing bickering between the two over strategy, particularly over Yahoo’s direction or lack thereof.

This deal is Alibaba’s biggest step towards its long-held goal of regaining full control of its future. Though still privately held, it plans to be publicly traded, giving momentum to finalize this deal with Yahoo.

“The completion of this transaction begins a new chapter in our relationship with Yahoo,” Jack Ma, Alibaba’s chairman and chief executive, said in a statement.

"This yields a substantial return for investors while retaining a meaningful amount of capital within the company to invest in future growth," Ms. Mayer said in a press release.