The rapidly increasing information density required of modern magnetic data storage devices raises the question of the fundamental limits in bit size and writing speed. At present, the magnetization reversal of a bit can occur as quickly as 200 ps (ref. 1). A fundamental limit has been explored by using intense magnetic-field pulses of 2 ps duration leading to a non-deterministic magnetization reversal. For this process, dissipation of spin angular momentum to other degrees of freedom on an ultrafast timescale is crucial. An even faster regime down to 100 fs or below might be reached by non-thermal control of magnetization with femtosecond laser radiation. Here, we show that an efficient novel channel for angular momentum dissipation to the lattice can be opened by femtosecond laser excitation of a ferromagnet. For the first time, the quenching of spin angular momentum and its transfer to the lattice with a time constant of 120+/-70 fs is determined unambiguously with X-ray magnetic circular dichroism. We report the first femtosecond time-resolved X-ray absorption spectroscopy data over an entire absorption edge, which are consistent with an unexpected increase in valence-electron localization during the first 120+/-50 fs, possibly providing the driving force behind femtosecond spin-lattice relaxation.