Microsoft Corp and Yahoo Inc said on Thursday they have won unconditional approval from regulators in the United States and Europe for a planned search deal that would challenge market leader Google Inc.

Under the terms of the partnership struck in July last year, Microsoft's Bing becomes the search engine for both, while Yahoo focuses on attracting big advertisers.

The deal was approved without restrictions by both the U.S. Department of Justice and the European Commission. The companies said they plan to begin the partnership in the coming days and be completed by early 2012.

Google had 90 percent of the global search market compared with 7.4 percent for a combined Yahoo and Bing, according to November data from Web research firm StatCounter.

The (European) Commission's first phase market investigation has indicated that scale is an important element to be an effective competitor in search advertising, the EU executive said in a statement.

It said the companies expected their partnership to strengthen Microsoft against Google.

The Commission said the deal would not significantly impede competition in Europe. Sources told Reuters last week the deal would be cleared without the companies offering any concessions.

Google abandoned its own advertising deal with Yahoo in 2008 under pressure from the Justice Department. Microsoft had opposed the proposed tie-up.

(Reporting by Foo Yun Chee; editing by Andre Grenon)