The seven-time NBA All Star's investment company signed a framework agreement with the club's three co-owners who agreed to sell Yao all their shares in the club, Xinhua news agency said.
"I grew up in the city and became a professional player in this team, so I hope I can do something to help," Yao was quoted as saying on Shanghai TV.
The Sharks tied for the worst deficit in 14 years of the Chinese Basketball Association (CBA) last year and were in danger of failing to start the new season in November because of their dire finances.
The 28-year-old Yao topped the Forbes list of the wealthiest Chinese entertainers with an estimated income of 388 million yuan ($56.81 million) in 2008.
Running the Sharks will cost about 20 million yuan a year, according to the China Business News newspaper.
"In consideration of Yao's affection for the team, his accomplishments in basketball and the experience and vision he has gained from the seven years in the NBA, we believe he is the most appropriate person to the take over the team," said Shanghai Sports Bureau chief Yu Chen.
Yao started playing for the Sharks as a teenager, leading them to their only CBA title before he left for North America in 2002.
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