A helicopter had just taken off when there was a loud bang and the engine started to overspeed. After landing and inspection, the transmission was disassembled. It was discovered that the assembly containing the output shaft to the main rotor had failed. The output shaft assembly was made up of two parts: the output shaft with an integral 10 in. diam upper disc at approximately mid-section; and a 10 in. diam lower disc. During manufacture, the lower disc was attached to the output shaft by an electron beam weld. The fracture had a single fatigue initiation site, coincident with the annular zone of remelted material on the inner surface of the disc. In the lower disc, the fracture was also 80% fatigue, but high stress, low cycle in nature and contained multiple initiation sites coincident with an electron beam weld bead. It was concluded that fatigue in the upper disc resulted from the presence of a metallurgical stress concentration caused by the electron weld beam impingement on the inner surface of the upper disc. An Airworthiness Directive was issued, and the manufacturer issued a mandatory service bulletin outlining a periodic inspection for the output shaft assembly.