The boards of Verizon and Vodafone unanimously approved the sale.
(Read more: How should Vodafone spend Verizon's $130 billion?)
The deal will give Verizon full access to the wireless unit's cash, handing it fresh firepower to invest in superfast mobile networks and fend off challengers in a U.S. market expected to grow more competitive in the coming years.
Verizon said it expected the transaction to be immediately accretive to earnings per share by about 10 percent, excluding any one-time adjustments.
While Vodafone will lose its best asset, it will get a war chest that it can use to reward shareholders and bolster its European operations, which are under pressure from recession and tough regulation.
The British firm said it planned to plough 6 billion pounds ($9.3 billion) into improving its mobile and broadband networks over the next three financial years. It said the investment program dubbed Project Spring would help it boost growth to underpin its increasing dividend payments to shareholders.
It will have a U.S. tax liability of around $5 billion.
The deal is likely to be the defining event in the careers of Colao and Lowell McAdam, the congenial chief executives of Vodafone and Verizon, who rebuilt relations between the two sides to such an extent that they could complete the deal that long eluded their predecessors.
The move to sell out of the joint venture closes a heady expansionist chapter for Vodafone, one of Britain's best-known companies, which grew rapidly over the last 20 years through a spate of aggressive deals, taking its brand into more than 30 countries across Europe, Africa and India.
—By Reuters with CNBC