The airline was sold for $24 million to the Volo do Brasil consortium made up of US investment fund Matlin Patterson and some Brazilian partners, who recently completed a deal for VarigLog, the airline's former freight operation.
They were the only group to bid in an auction to sell the carrier on Thursday.
Varig was once the national carrier but it was placed under bankruptcy protection last year and since the end of June has only been flying to half of its usual destinations.
The company is more than US$ 3 billion in debt, and last turned a profit in 1995. It has only 13 planes left, down from 70 a year ago.
The airline is having trouble paying for landing and departure fees and fuel for its jets. More than two-thirds of its planes are grounded as leasing companies demand their crafts back and the company cannot pay for basic maintenance.
There are currently about 10,600 employees but that number is expected to be drastically cut under the takeover plan.
Volo do Brasil had already put enough money into Varig to keep it flying during the past month that it will not have to pay any more to complete the purchase.
The new company will continue flying the airline's domestic and international routes, honouring tickets already issued, but without the airline's massive debts, which belongs to the "old" Varig.
However, the deal compels the company to invest a total $485 million dollars into the airline to keep it going.
Officially, Varig still controls 60 percent of Brazil's international routes, to 21 foreign destinations. But rivals Tam and Gol, which have lower costs and cheaper tickets, have left Varig with only 16% of the domestic market.