In a deal announced after the London Stock Exchange closed last night, Verizon will take full control of the largest mobile operator in the US by paying Vodafone $58.9bn in cash, $60.2bn in Verizon stock and another $11bn from smaller transactions.
Vodafone said it will return £54.3bn, equivalent to 71% of the net proceeds, to its shareholders, which is equivalent to 112p per share. UK shareholders will net a share of around £22bn in cash and Verizon shares.
Edinburgh-based funds houses Standard Life Investments and Scottish Widows Investment Partnership are among Vodafone's largest institutional investors.
Vodafone chief executive Vittorio Colao said: "We are pleased that our long and successful partnership with Verizon will yield a significant return of value to our shareholders, rewarding them for their continuing support of Vodafone's investment strategy."
The deal is the third biggest ever corporate transactions after AOL's $181bn acquisition of Time Warner in 2000 and Vodafone's own $203bn purchase of Mannesman AG of Germany in 1999.
The sale is expected to complete in the first quarter of 2014. Verizon could be landed with a break fee of as much as $10bn if the transaction does not go ahead.
Vodafone said it will invest £6bn from its proceeds in improving its mobile and broadband networks, over the next three financial years.
It said the investment programme it calls Project Spring would help it boost growth to underpin plans to increase dividend payments to shareholders, beginning with an 8% rise in 2014.
But it is also expected to look at purchases to enhance its presence in territories in continental Europe. Mr Colao said Vodafone would continue its disciplined approach to acquisitions.
In June it agreed to buy Kabel Deutschland for €7.7bn (£6.6bn).
The cash and shares return to investors is a relief to shareholders who feared Vodafone would hand them as little as 50% of the sale proceeds.
A large purchase such as that of Liberty Global, which recently bought Virgin Media for £16bn, is now seen as less likely.
The sale price of $130bn was at the top end of expectations. There had been concerns among some investors that Vodafone would miss what some see as a peak in the market.
Instead it has been praised for biding its time, and picking up £15bn in dividends as it waited to conclude a deal with Verizon.
Vodafone could yet be the subject of further corporate intrigue as some in the City think in its slimmed down form it could be a takeover target for the likes of US giant AT&T.
Verizon chief executive Lowell McAdam said: "These transactions mark the culmination of a sustained and highly productive relationship between Verizon and Vodafone, and provides a very strong foundation for both companies to achieve their respective long-term strategic goals."
Mr Colao said he remained "super committed" to Vodafone following the deal.
Vodafone's shares closed up 6.95p or 3.4% at 213.2p before the agreement was confirmed.