Semel is leaving the board effective immediately, Yahoo announced Thursday. He will be replaced as non-executive chairman by another board member, Roy Bostock, the company said.
Semel was chairman and CEO of Yahoo for six years until he was replaced in a management shuffle last June. Yang, one of Yahoo's co-founders, was made CEO, and Semel was demoted to non-executive chairman.
As CEO, Semel helped to build Yahoo's audience from 170 million to more than 500 million users. But he was also blamed for missteps that allowed Google to build a commanding lead in online search and advertising, prompting last year's reorganization.
"With the Company moving forward under new leadership, I believe this is an appropriate time for me to step down from the board," Semel said in the statement.
He approached the board several months ago about leaving once a replacement could be found, Yahoo said.
Bostock has a long history in the advertising industry, "an area that is more important than ever to Yahoo's business and our long term success," the company said.
On Tuesday Yahoo reported that net income for its fourth quarter declined to $206 million, from $269 million a year earlier. It also announced plans to lay off about 1,000 staff.
Semel's departure from the board appears to mark the end of his tenure at Yahoo. Yang thanked him for "his many contributions to Yahoo over the years and for helping to lay a firm foundation for future success and improved financial performance."
Bostock has been a board member at Yahoo since May 2003 and was elected unanimously by the board to replace Semel. From 1990 to 2000 he was chairman and CEO of D'Arcy Masius Benton & Bowles, and its successor advertising company The MacManus Group.