Previously, Combs and Warner Music Group's Atlantic label had a deal that lasted almost five years.
The current Bad Boy roster and catalog will remain with Bad Boy's Warner Music joint venture which was once valued at $60 million.
Combs' run with Atlantic was mixed with hits from TV reality show act Danity Kane and hip hop/R&B artists like Yung Joc and Cassie between 2006 and 2007. But in the last two years Bad Boy has had limited chart-topping success.
Warner Music signed a deal with Combs in April 2005 just ahead weeks of going public. Analysts said later it was a bid to highlight the diversity of Warner's roster with hip hop and R&B artists. Warner had been best known for rock acts like the Red Hot Chili Peppers and Led Zeppelin.
Interscope, which is headed by Jimmy Iovine, has a long history with hip hop and at times courted controversy with partnerships with labels like Death Row Records in the nineties.
Today it is home to labels like rapper 50 Cents' G-Unit Records and Eminem's Shady Records but also pop artists like Lady Gaga and Nelly Furtado.
Universal Music Group is owned by French media giant Vivendi.