Channel 5 has been purchased by Viacom for $760 million (£450m).
Previous owner Richard Desmond previously bought the channel for $171m (£101m) in 2010 and had been seeking around $1.1 billion (£0.65bn).
Discovery and BSkyB also dropped out of the auction, with Discovery bidding $585m (£346m).
Viacom - led by Philippe Dauman - becomes the first US company to own a British free-to-air channel.
The company also owns cable networks MTV, Nickelodeon and Comedy Central, as well as the Paramount Pictures film studio.
The new deal will expand Viacom's UK presence, while experts have tipped the company to use some of its Nickelodeon and reality TV content on the channel.
Channel 5 has increased its ratings since the 2010 takeover, with shows such as Big Brother, NCIS and CSI among its most popular.
Viacom's price is said to be nine times more than Channel 5's pre-tax earnings last year.
"The transaction brings Viacom one of British television's biggest brands, and the only commercial public service broadcaster to consistently grow viewership share in recent years," Viacom said in a statement.
"Channel 5's diverse programming slate is viewed by more than 80% of the UK population each month, benefits from the programming grid prominence associated with its public service broadcaster status, and will complement Viacom's popular pay TV networks, which connect with focused and valuable audiences."
Dauman added: "The acquisition of Channel 5 accelerates Viacom's strategy in the UK, one of the world's most important and valuable media markets.
"Channel 5's momentum is indisputable, with impactful programming, increasing popularity and a growing digital platform. Channel 5's management and employees have done an outstanding job building their brand and we are pleased to welcome them to our team.
"Viacom's global resources, technology and expertise will help Channel 5 develop even more compelling programming and provide content to consumers in exciting new ways. In addition, we will introduce our popular content to new UK audiences and create a comprehensive offering for our commercial partners on-air and online."
Previous owner Richard Desmond previously bought the channel for $171m (£101m) in 2010 and had been seeking around $1.1 billion (£0.65bn).
© Channel 5
Channel 5
© PA Images
Richard Desmond
Discovery and BSkyB also dropped out of the auction, with Discovery bidding $585m (£346m).
Viacom - led by Philippe Dauman - becomes the first US company to own a British free-to-air channel.
The company also owns cable networks MTV, Nickelodeon and Comedy Central, as well as the Paramount Pictures film studio.
The new deal will expand Viacom's UK presence, while experts have tipped the company to use some of its Nickelodeon and reality TV content on the channel.
Channel 5 has increased its ratings since the 2010 takeover, with shows such as Big Brother, NCIS and CSI among its most popular.
Viacom's price is said to be nine times more than Channel 5's pre-tax earnings last year.
"The transaction brings Viacom one of British television's biggest brands, and the only commercial public service broadcaster to consistently grow viewership share in recent years," Viacom said in a statement.
© Channel 5
Big Brother host Emma Willis
"Channel 5's diverse programming slate is viewed by more than 80% of the UK population each month, benefits from the programming grid prominence associated with its public service broadcaster status, and will complement Viacom's popular pay TV networks, which connect with focused and valuable audiences."
Dauman added: "The acquisition of Channel 5 accelerates Viacom's strategy in the UK, one of the world's most important and valuable media markets.
"Channel 5's momentum is indisputable, with impactful programming, increasing popularity and a growing digital platform. Channel 5's management and employees have done an outstanding job building their brand and we are pleased to welcome them to our team.
"Viacom's global resources, technology and expertise will help Channel 5 develop even more compelling programming and provide content to consumers in exciting new ways. In addition, we will introduce our popular content to new UK audiences and create a comprehensive offering for our commercial partners on-air and online."