The move comes two weeks after Yahoo hired Scott Thompson as chief executive. Yang praised that hire and said only that it was time to move on.
Yahoo co-founder Jerry Yang has relinquished his board seat and "all other positions" with the beleaguered Web giant, the company announced this afternoon.
Two weeks ago, the company announced a new chief executive, Scott Thompson, though it's unclear if Yang's departure is related to that hire.
In a press release, Yang praised Thompson and said only that it is time for him to move on.
"The time has come for me to pursue other interests outside of Yahoo," Yang said in a statement. "As I leave the company I co-founded nearly 17 years ago, I am enthusiastic about the appointment of Scott Thompson as chief executive officer and his ability, along with the entire Yahoo leadership team, to guide Yahoo into an exciting and successful future."
In addition to leaving the board and his post as "Chief Yahoo," Yang also stepped down from the boards of Yahoo Japan and Alibaba Group, Yahoo's Chinese Internet partner.
The news came after the stock markets closed. But in after-hours trading, Yahoo shares climbed 3 percent, to $15.90.
Yang co-founded Yahoo in 1995 with David Filo and served as chief executive from June 2007 to January 2009. Filo remains at the company. Yang's tenure as chief executive was tumultuous, with the company reporting a 64 percent drop in net income at a time when the online advertising market was softening. That led to layoffs, including one round that cut 1,000 jobs in February 2008, and another that carved away 1,430 later that same year.
Yang was replaced as CEO with Carol Bartz, who was fired last September, as Yahoo continued to sputter financially.
Yahoo Chairman Roy Bostock offered nothing but praise for Yang in the company press release.
"While I and the entire board respect his decision, we will miss his remarkable perspective, vision, and wise counsel," Bostock said in the statement.
Yang has been something of a lightning rod for investors who want change at the struggling company. Daniel Loeb, manager of hedge fund Third Point, which owns Yahoo shares, called on Yang to resign last November. Loeb cited, among other shortcomings, Yang's "ineptitude in dealing with the Microsoft negotiations to purchase the company in 2008."
The decision to reject Microsoft's $44.6 billion bid for Yahoo will likely define Yang's leadership at the company more than any other--perhaps even more than his co-founding of the company. It was, in hindsight, one of the biggest strategic blunders in corporate history, as Yahoo's value tanked after the company walked away from Microsoft. Yang was said to be one of the biggest obstacles to the deal, unwilling to let go of the company he helped create.
The board, too, has received much criticism. And earlier this month, the company reportedly hired an executive search firm to find possible replacements for some board members.
Indeed, Yang's departure could presage further significant changes at the company. Yang has been a powerful voice on the board. His departure, and Thompson's arrival, could lead to other changes. Already, All Things Digital is reporting that four more Yahoo directors may also leave the company.
Updated at 3:46 p.m. PT with news and analysis.