Yahoo announced the departure in a securities filing on Monday.
With much fanfare, Yahoo appointed 37-year-old Marissa Mayer as CEO two weeks ago. Retaining Levinsohn, who had been interim CEO since May, would have been one of her first big triumphs.
Levinsohn's exit is not unexpected. Yahoo's stock barely moved in after-hours trading. Following the announcement, it rose 2 cents to $16. The stock closed Monday's regular session down 13 cents, or less than 1 percent, at $15.98. In the last year, Yahoo's stock has traded between $11.09 and $16.79.
Levinsohn, 48, had been head of Yahoo's global media business and had pushed the company to enter into exclusive partnerships with the likes of CNBC and Tom Hanks to create original content.
But Levinsohn was passed over twice by the company's board in favor of other top executives, including Scott Thompson, who resigned in May over discrepancies on his resume after just four months on the job.
The appointment of Mayer, a former Google top executive who oversaw its email, mapping and news services, suggests the company intends to focus more on the functionality of its products rather than on the media content which was Levinsohn's domain.
Analyst Sameet Sinha with B. Riley & Co., said Levinsohn's exit doesn't indicate a big shift in strategy, although a turnaround plan under Mayer is still unclear.
"This was an issue of retaining an executive who was CEO," Sinha said. "To say they will be focused more on products and less on content would be foolish. It's their bread and butter."
Levinsohn leaves Yahoo with a hefty severance package. As part of the agreement, he was granted 67,000 shares of restricted Yahoo stock and the option to buy another 250,000 shares at $15.80 apiece. Both benefits were immediately available to Levinsohn.
He also received a lump sum equal to his salary and bonus of about $1.5 million along with health premiums and faster vesting of stock options he had accrued already. Levinsohn's compensation package was valued at $12 million last year.
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