Mayer, who was the 20th employee of search giant Google and its first female engineer, starts today (July 17) in what is being regarded as a significant coup for Yahoo.
The once mighty web firm has struggled to compete with the likes of Google, Facebook and Twitter in the online display advertising market, but has also been racked by internal turmoil.
Mayer becomes the firm's fifth chief executive in five years, but she arrives with 13 years experience at Google, including most recently the vice president responsible for maps and location services, including Google Maps, Google Earth, Street View and local search for desktop and mobile.
"I am honoured and delighted to lead Yahoo, one of the internet's premier destinations for more than 700 million users," said Mayer.
"I look forward to working with the company's dedicated employees to bring innovative products, content, and personalised experiences to users and advertisers all around the world."
Yahoo said that the appointment of Mayer signalled its "renewed focus on product innovation to drive user experience and advertising revenue" for the company's operation, including Yahoo Finance, Yahoo Sports, Yahoo Mobile, Yahoo Mail and Yahoo Search.
Mayer joined Google in 1999 as only the firm's 20th employee and led the early development of its most famous products, including the flagship search engine and iconic homepage.
She also helped create much of the "look and feel" of the Goole user experience, launching innovations such as image, book and product search, toolbar, iGoogle, Google News and Gmail.
Yahoo will hope that Mayer can bring some calm to the company that has been rocked by scandal at its very top. Previous chief executive Scott Thompson had to leave the role after only four months following revelations that he padded out his CV. This led to a reshuffle of the company's board and the resignation of chairman Roy Bostock.
Thompson's predecessor as Yahoo chief executive, Carol Bartz, had aimed a foul mouth salvo at the firm's board after she was fired from the role for under performing.
"The Board of Directors unanimously agreed that Marissa's unparalleled track record in technology, design, and product execution makes her the right leader for Yahoo at this time of enormous opportunity," said Fred Amoroso, chairman of the Yahoo board.
Yahoo co-founder David Filo added: "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.
"I look forward to working with her to enhance Yahoo's product offerings for our over 700 million unique monthly visitors."
Mayer is six months pregnant with her first child, which is due in October, but she told reporters that her maternity leave would be just "a few weeks long and I'll work through it".
She joins a small list of elite women in top Silicon Valley jobs, alongside Hewlett-Packard chief executive Meg Whitman, IBM head Virginia Rommetty and Sheryl Sandberg, the billionaire chief operating officer Facebook.
"Yahoo's products will continue to enhance our partnerships with advertisers, technology and media companies, while inspiring and delighting our users," said Mayer. "There is a lot to do and I can't wait to get started."