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The rare earth (Yb3+) substituted W-type hexagonal ferrites with composition CaPb2-xYbxFe16O27 (x = 0.0, 0.5, 1.0, 1.5, 2.0) were synthesized by a facile and cost-effective sol-gel auto combustion method with post heat treatment. The synthesized hexagonal ferrites were characterized by a variety of analytical techniques, and an impedance analyzer was used to investigate the effects of Ytterbium on structural, magnetic, spectral and dielectric properties. The relationship between their impedance, structure and dielectric properties was investigated. The X-ray diffraction patterns verify the presence of single-phase W-type hexagonal ferrites. Physical properties such as Dbulk (bulk density), Dxrd (X-ray density), and P (porosity) of the CaPb2-xYbxFe16O27 W-type hexagonal ferrites were calculated. The bulk density of all the samples was decreased, and X-ray intensity was increased with the Ytterbium replacement in the W-type hexaferrite. By adding Yb3+ ions, the lattice parameters, cell volume and X-ray density were reduced due to the substitution of ytterbium with smaller ionic radii compared to the lead ion with large ionic radii. The AC-conductivity was increased from (1.523 × 10−5 to 6.699 × 10−5) Ωcm−1. The dielectric constant and tangent loss was found to decrease substantially. The magnetic properties were found to enhance by the substitution of Yb3+. The low coercivity value of Yb3+ substituted W-type hexagonal ferrites are suitable for magnetic recording media operated at a high-frequency regime. The enhancement of electrical, dielectric and magnetic characteristics suggests these materials as promising for multi-layer chip inductors (MLCIs) circuit applications.