Parent company DMGT confirmed that the deal, first announced on 21 November, has now been finalised.
It will see DMGT receive £52.5m for Northcliffe plus 38.7pc of the new company, which will be headed by former Mirror Group boss David Montgomery.
The Iliffe family, owners of Yattendon Group, has sold its regional publishing arm Iliffe News & Media to Local World in exchange for a 21.3pc shareholding in the new business while Trinity Mirror has acquired a 20pc shareholding.
In a statement, Local World said the deal would create “a media business dedicated to the optimisation of local content and commerce across all platforms.”
“Local World will harness its proven publishing capabilities with new technologies to provide audiences – both print-readers and online consumers – with high quality, reliable and useful content in whatever format they choose,” it said.
Local World chief executive Steve Auckland added: “This is the start of an exciting journey for everyone at Local World and a pivotal moment for local media. I’d like to thank everyone who played a role in the transaction, especially all our employees who helped the process run so smoothly.
“I’m looking forward to us building on our existing strengths, transforming our products and services, and ensuring we are the one-stop-shop for local content and commerce.”
In a separate statement, DMGT said £30m of the cash proceeds from the disposal will be paid into pension funds.
Northcliffe Media earned operating profits of £26m from revenues of £213m in the 12 months to September, 2012.