Mittal's offer of 24.2 billion hryvnias ($4.8 billion) for the Kryvorizshtal plant in central Ukraine brought to a dramatic close nearly an hour of fast-moving bidding with Industrial Group, controlled by Arcelor.
Yushchenko had vowed in "Orange Revolution" election rallies last year to stage a new sale and right the 2004 privatisation of the plant, which was later ruled illegal. Analysts said the outcome would boost his standing before next March's parliamentary poll.
The winning price dwarfed the $3 billion that Yushchenko's liberal administration had hoped to fetch in the sale, which was designed to lure back Western investors made wary by turmoil during his first nine months in office.
Analysts suggested Mittal may have paid too high a price.
Mittal officials declined comment on the price, saying they were in a position to make the purchase.
A beaming Yushchenko told reporters after a signing ceremony with Mittal, "The amount we will receive for this company will be 20 percent higher than all the proceeds received in all the years of the Ukrainian privatisation. "What happened today shows Ukraine is capable of staging honest privatisations, observing all vital legal procedures."
Prime Minister Yuri Yekhanurov said he wanted to use the proceeds to buy out five or six other companies he said had been sold unfairly.
AUCTION TELEVISED LIVE Monday's proceedings, conducted in a small room, were broadcast live on television.
Dmitry Parfyonenko, deputy head of Ukraine's privatisation agency, described the price as "fantastic and unbelievable". The agency's head announced her resignation after the auction on the grounds that she opposed the sell-off of big industrial sites.
The sale of the 93.02 percent stake in the steelmaker was touted as a chance to attract Western investment, which had all but dried up during the chaotic term of previous Prime Minister Yulia Tymoshenko, beset by rows over privatisation.
Yekhanurov, appointed last month to end the infighting, pledged his government would "do everything so that investors will realise how the climate has changed". Finance Minister Viktor Pynzenyk said part of the proceeds from the sale would be used to cover the 2006 budget deficit.
The government intends to allow Mittal to make payment in hard currency and will not place the cash on the currency market all at once to avoid distorting the market, he said.
Less than a year into his mandate, Yushchenko is overseeing an economy growing at its slowest pace in five years. His prime minister on Monday reduced the 2005 growth forecast to between 2 and 4 percent, the third cut this year.
Yushchenko repeatedly denounced as "theft" the original sale of Kryvorizhstal in June 2004 for $800 million, below other offers, to a group of industrialists linked to his predecessor. Mittal, barred from that sale, had wanted to offer $2.5 billion.