AOL announced today that it has reached an agreement with Microsoft where the software giant will acquire more than 800 patents from AOL in a deal worth $1.056 billion. Microsoft will also be licensing more than 300 additional patents from AOL as part of the deal.

Following the sale, AOL will continue to hold a significant patent portfolio of over 300 patents and patent applications spanning core and strategic technologies, including advertising, search, content generation/management, social networking, mapping, multimedia/streaming, and security among others. AOL also received a license to the patents being sold to Microsoft.

The transaction is expected to be completed by the end of 2012, pending approvals.