Amazon CEO Jeff Bezos is buying The Washington Post newspaper for $250 million (£166 million).
Bezos is buying the paper in a personal capacity, with Amazon not involved in the purchase.
The Graham family has owned The Washington Post for the past 80 years. Post chief executive Donald Graham said, "Years of familiar newspaper-industry challenges made us wonder if there might be another owner who would be better for the Post.
"Jeff Bezos' proven technology and business genius, his long-term approach and his personal decency make him a uniquely good new owner for the Post."
The Washington Post group owns Kaplan, a test preparation company, and other titles like Slate magazine, TheRoot.com and Foreign Policy. As part of the deal, all these will remain in the hands of the Graham family.
The Grahams said the deal is expected to be closed in the next 60 days. The newspaper, which broke the Watergate scandal, has suffered in recent years, like most print titles, with falling advertisement revenues as a result of widening Internet news coverage.
Bezos will own the Post outright. He has written a memo to the Post's staff stating he will not lead the paper's day-to-day operations. But he noted the paper had to "invent" and "experiment" in response to the changing publishing market.
Amazon has already done its bit in the changing book publishing business with the introduction of the Kindle ebook reader, getting most major book publishers on board in the process.
In terms of prestige, the Post is alongside the New York Times in terms of perceived authoritative coverage in the US, although its circulation went down by an estimated 6.5 per cent in the last year, with sales well under 500,000.
In his memo published on the Post website, Bezos said he would not be seeking to change "the values" of the paper.
But, he added, "There will, of course, be change at the Post over the coming years. The internet is transforming almost every element of the news business - shortening news cycles, eroding long-reliable revenue sources and enabling new kinds of competition, some of which bear little or no news-gathering costs."
Bezos, however, admitted he could not say yet what changes he would have to make to turn things around.
Last weekend, the New York Times announced it had sold the Boston Globe newspaper to John Henry, owner of Liverpool FC and the Boston Red Sox, for $70 million (£47 million) - after paying $1.1 billion (£733 million) for the iconic paper in 1993.