"Today's agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction," said Microsoft's general counsel Brad Smith.
Microsoft bought 925 patents and patent applications from AOL. It is now selling 650 of those patents to Facebook as well as licences to the other 275.
There has been a series of recent patent deals between technology companies as they try to defend themselves in lawsuits.
If a company successfully sues another it can demand a sales ban of its competitor's products, or force the loser to pay expensive licence fees.
Since the start of the year, Intel, Google and Facebook are among those to have bought significant numbers of patents from other technology companies.
Facebook bought a number of patents from IBM last month.