Yahoo announced today that it is repurchasing 40 million shares of Yahoo common stock held by Third Point LLC at $29.11 per share, which is the closing price from Friday. That puts the deal at about $1.164 billion.

Following the transaction, Third Point will own about 20 million shares less than 2% of the company’s outstanding stock.

Yahoo board members Daniel S. Loeb, Harry J. Wilson and Michael J. Wolf are stepping down. Each was nominated by Third Point. Their resignations will be effective July 31st. Yahoo’s board will then consist of seven members. Though also appointed by Third Point (along with the Board, mutually), Max Levchin will remain on the board.

Yahoo CEO Marissa Mayer said, “Daniel Loeb had the vision to see Yahoo for its immense potential – the potential to return to greatness as a company and the potential to deliver significant shareholder value. On behalf of the Board and our entire team, I’d like to take this opportunity to personally thank Dan, Michael, and Harry for the tremendous opportunities they created here at Yahoo!. They have been incredibly supportive as we have built our executive staff and developed our strategy, and they have helped position Yahoo! for future success. While there’s still a lot of work ahead, they’ve given us a great foundation.”

“Harry, Michael and I are pleased to have played key roles in Yahoo’s resurgence since we joined the Board last spring,” said Loeb, who is Third Point’s CEO. “Since our Board’s rigorous search led us to hire Marissa Mayer as CEO, Yahoo!’s stock price has nearly doubled, delivering significant value for shareholders. I’m confident that with Marissa at the helm and her team’s focus on innovation and engaging users, Yahoo! has a bright future.”

The news follows a previous announcement from Yahoo about its intent to purchase an additional $1.9 billion of its common stock. This is part of that. Yahoo says that $700 million will remain under the $5 billion buyback authorization announced last year, upon completion of the repurchase. Yahoo will fund the deal mainly with cash.