The deal is worth $US110 billion ($A158 billion).
It brings together the studios behind Mission: Impossible, Harry Potter and DC Studios alongside major television and streaming networks such as CBS, CNN, Paramount+ and HBO Max — forming an expansive entertainment company spanning film, TV and news.
The merger is a chance "to build the next-generation media and entertainment company, powered by creativity and technology," Ellison said in a memo to employees on Tuesday, outlining his vision.
The goal, he said, was not simply to get bigger but "to take on the biggest players in our industry".
The new company, called Skydance, is the latest iteration of a conglomerate once controlled by the late Sumner Redstone that has precipitously shrunk over the years, as audiences flock to news and entertainment delivered by a growing cadre of smaller publishers and creators who are chipping away at once-mighty Hollywood.
Skydance not only faces competition from Netflix, Disney and others, but also from tech companies Apple , Meta, and Amazon, as well as the growing threat of artificial intelligence.
Ellison said the merger was necessary to better take on these challengers at a time when the media industry had become complacent.
"They allowed Netflix to disrupt their business," he told reporters in a press conference on Tuesday.
"They allowed Amazon Prime Video to come and disrupt their business. They didn't transform, and they held on to the past for too long."
Shares of the combined company moved to the New York Stock Exchange from Nasdaq on Tuesday to trade under the ticker SKYD.
Settlements with a coalition of US states and a Hollywood writers union removed the main legal barriers to the merger, one of the largest in media history.
It comes as Hollywood faces declining cable TV subscriptions, the high cost of competing for streaming audiences and persistent pressure from unions over jobs and creative workers' rights.
President Donald Trump expressed approval on Tuesday when asked about the deal.
"It's going to be a great company," he told reporters.
"That's a great merger. I'm glad they let it go."
Ellison last week said the name Skydance was chosen to retain the individual identities of Paramount and Warner Bros studios, rather than combining them under a new brand.
Wall Street analysts, however, said the name reinforces the extent of Ellison's control, highlighting how some of Hollywood's most iconic brands now answer to him and how he has a platform to impose his strategy and culture.
After merging with Paramount in 2025, Skydance set its sights on Warner Bros, entering a heated bidding contest with Netflix while drawing interest from other potential suitors, including Comcast.
Warner Bros shareholders received an additional $US41.9 million ($A60.0 million) in a "ticking fee," based on the number of days between September-end and the deal-closing, according to a regulatory filing.
Skydance plans to combine its streaming services, including HBO Max and Paramount+, into a single service and has pledged to release at least 30 films each in the first two years after closing, rising to 32 a year for the following three.
