Mayer will also join Yahoo’s board of directors and the appointment will be effective July 17, Yahoo said.
The appointment of Mayer signals a renewed focus on product innovation to drive user experience and advertising revenue at Yahoo, the company noted in a press release.
Mayer, the first female engineer hired at Google, joined the Internet search giant in 1999 as its 20th employee and led efforts for many of Google’s most recognizable products including the search product and homepage.
She most recently served as Google’s vice president of location and local services.
In a statement, Mayer said she was “honoured and delighted” to lead Yahoo, one of the Internet’s premier destinations for more than 700 million users.
“I look forward to working with the company’s dedicated employees to bring innovative products, content, and personalized experiences to users and advertisers all around the world,” she said.
Mayer, 37, will be Yahoo’s fifth CEO in five years and the appointment is making her one of the most powerful women in the US technology industry.
Mayer will fill the post left open by Scott Thompson, former Yahoo CEO who stepped down in May over academic credentials.
Yahoo executive Ross Levisohn was named as the company’s interim CEO after Thompson’s departure and Yahoo has been searching for a new CEO since then.
In an interview with The New York Times Monday, Mayer said that she was first approached in the middle of June about the job after returning from a trip to China.
“It was a reasonably easy decision” to take the top job at Yahoo as it is one of the best brands on the Internet, Mayer told the newspaper, which first reported her surprising appointment before Yahoo’s official announcement.
The choice of Mayer, who has the experience of managing Google’s many innovative products, is seen as a new opportunity for Yahoo to make a fresh start.
“Marissa is a well-known, visionary leader in user experience and product design and one of Silicon Valley’s most exciting strategists in technology development,” David Filo, co-founder of Yahoo, said in a statement.
However, Mayer will be facing an uphill battle as she tries to revive Yahoo, as the company has lagged behind rivals such as Google and Facebook, which have been more nimble and more adept at leveraging the increasingly social nature of the Web, The New York Times noted in its report.