AOL will pay $300 million of the pricetag in cash, and the rest in stock. Buying the 5-year-old primarily liberal political news aggregator will be AOL’s biggest acquisition since it split from Time Warner in 2009. Below is a press release (see below) just issued from AOL and The Huffington Post, which has been for sale for some time now since it was launched on May 9, 2005. Over the years HuffPo has taken in various investors so founders Arianna Huffington and her partner, former Time Warner exec Ken Lehrer, don’t get to just pocket the windfall. Arianna will stay on according to the announcement as president and editor-in-chief of the newly formed The Huffington Post Media Group which will integrate all Huffington Post and AOL content.

According to Arianna’s own behind-the-scenes account of the sale, ”my New Year’s resolution for 2011 was to take HuffPost to the next level — not just incrementally, but exponentially. Now was the time to take leaps… Around the same time, I got an email from Tim Armstrong [AOL Chairman and CEO], saying he had something he wanted to discuss with me, and asking when we could meet. We arranged to have lunch at my home in LA later that week. The day before the lunch, Tim emailed and asked if it would be okay if he brought Artie Minson, AOL’s CFO, with him. The next day, he and Artie arrived, and, before the first course was served, Tim said he wanted to buy The Huffington Post and put all of AOL’s content under a newly formed Huffington Post Media Group, with me as its president and editor-in-chief. There were many more meetings, back-and-forth emails, and phone calls about what our merger would mean for the two companies. Things moved very quickly. A term sheet was produced, due diligence began, and on Super Bowl Sunday the deal was signed. In fact, it was actually was signed at the Super Bowl.”

News aggregators like HuffPo haven’t been as sought after for acquisitions as original content-generating websites in recent years. And whenever possible buyers for The Huffington Post were discussed in media circles, the sticking point was always seen as HuffPo’s unabashed partisan image. That’s why this deal looks to be very risky for AOL — because of The Huffington Post’s liberal Democrat leanings. Huffington herself is a frequent guest on political shows defending the left whereas AOL content to date has been apolitical and nonpartisan. I can’t imagine this acquisition will sit well with the right-wing whose media rivals to HuffPo probably will begin as soon as Monday lobbying conservatives to cancel their AOL accounts. On the other hand, HuffPo has risk, too. Liberals flocked to The Huffington Post after an initial shake-out period when Arianna was trying to be all things to all political factions — an editorial plan that went by the wayside after just a few months. Despite recent expansions into other areas like entertainment and features, HuffPo’s chief content is political and decidedly left. So if The Huffington Post now moves to the center to grab more neutral ground, the website could lose its loyal base of liberal supporters.

Here’s the announcement:

New York, NY – February 7, 2011 – AOL Inc. [NYSE:AOL] announced today that it has entered into a definitive agreement to acquire The Huffington Post, the influential and rapidly growing news, analysis, and lifestyle website founded in 2005, which now counts nearly 25 million unique monthly visitors*.

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AdvertisementThe transaction will create a premier global, national, local, and hyper-local content group for the digital age – leveraged across online, mobile, tablet, and video platforms. The combination of AOL’s infrastructure and scale with The Huffington Post’s pioneering approach to news and innovative community building among a broad and sophisticated audience will mark a seminal moment in the evolution of digital journalism and online engagement.

The new group will have a combined base of 117 million unique visitors a month in the United States and 270 million around the world**. Following the close of this transaction, AOL will accelerate its strategy to deliver a scaled and differentiated array of premium news, analysis, and entertainment produced by thousands of writers, editors, reporters, and videographers around the globe.

As part of the transaction, Arianna Huffington, The Huffington Post’s co-founder and editor-in-chief, will be named president and editor-in-chief of The Huffington Post Media Group, which will include all Huffington Post and AOL content, including Engadget, TechCrunch, Moviefone, MapQuest, Black Voices, PopEater, AOL Music, AOL Latino, AutoBlog, Patch, StyleList, and more.

“The acquisition of The Huffington Post will create a next-generation American media company with global reach that combines content, community, and social experiences for consumers,” said Tim Armstrong, Chairman and CEO of AOL. “Together, our companies will embrace the digital future and become a digital destination that delivers unmatched experiences for both consumers and advertisers.”

Armstrong continued, “Arianna is a singularly passionate and dedicated champion of innovative journalistic engagement, and a master of the art of using new media to illuminate, entertain and enhance the national conversation. Arianna is a remarkable person and she will continue to create remarkable outcomes for the combined company.”

“This is truly a merger of visions and a perfect fit for us,” said Huffington. “The Huffington Post will continue on the same path we have been on for the last six years – though now at light speed – by combining with AOL. Our readers will still be able to come to the Huffington Post at the same URL, and find all the same content they’ve grown to love, plus a lot more – more local, more tech, more entertainment, more finance, and lots more video. We are fusing a legendary and powerful new media brand with a vibrant, innovative news organization, known for its distinctive voice, a highly engaged audience, an expertise in community-building, and a track record for demystifying the news and putting flesh and blood on the data while drawing our audience into the conversation.”

Huffington continued, “By uniting AOL and The Huffington Post, we are creating one of the largest destinations for smart content and community on the Internet. And we intend to keep making it better and better.”

Kenneth Lerer, The Huffington Post’s Co-Founder and Chairman, said, “The Huffington Post team has created a potent brand with the proven track record of knowing how to grow traffic, inform and entertain its readers and build a one-of-a-kind online community. Add that to the powerful scale and resources of AOL and you have the perfect combination for today and the future. Together these two companies will be a premier online content provider. From local citizen reporting through AOL’s Patch, to The Huffington Post’s national reporting on politics, business and culture, consumers will have access to everything they want whenever they want it.”

AOL has agreed to purchase The Huffington Post for $315 million, approximately $300 million of which will be paid in cash funded from cash on hand. The Huffington Post is privately owned by its two cofounders, as well as a group of investors. The proposed transaction is subject to customary closing conditions, including receipt of government approvals. The boards of directors of each company and shareholders of The Huffington Post have approved the transaction. The transaction is expected to close in the late first- or early second-quarter 2011.

The Huffington Post over-indexes on educated, affluent users, reaching the key decision makers in C-suites around the globe. The Huffington Post speaks to this influential audience via a host of prominent voices on its group blog. Among those who have blogged on The Huffington Post are: President Barack Obama, Secretary of State Hillary Clinton, Mayor Michael Bloomberg, Larry Page, Diane Sawyer, Buzz Aldrin, Nora Ephron, Bill Maher, Madeleine Albright, Robert Redford, Katie Couric, Neil Young, Rahm Emanuel, Mia Farrow, Senator Russ Feingold, Senator Al Franken, Ari Emanuel, Harry Shearer, Senator John Kerry, Representative Nancy Pelosi, Madonna, Lawrence Summers, Jamie Lee Curtis, Ryan Reynolds, Craig Newmark, Alec Baldwin, Aaron Sorkin, Natalie Portman, Scarlett Johansson, Russell Simmons, Sean Penn, Bill Gates, Norman Lear, Charlie Rose, Elizabeth Warren, Tavis Smiley, Sheryl Sandberg, George Clooney, and former President Bill Clinton. And the audience speaks back, generating four million comments a month***.

The Huffington Post’s affluent, influential audience, that is growing at a rate of 22 percent (December 2009 vs. December 2010)****, when combined with AOL’s massive scale, video offerings and local expertise, will represent an incredibly desirable demographic for a broad range of advertising partners across the board.

Editor-in-Chief Nikki Finke - tip her here.