Monitoring the progress of DNA molecules through a membrane pore has been postulated as a method for sequencing DNA for several decades. Recently, a nanopore-based sequencing instrument, the Oxford Nanopore MinION, has become available that we used for sequencing the S. cerevisiae genome. To make use of these data, we developed a novel open-source hybrid error correction algorithm Nanocorr (https://github.com/jgurtowski/nanocorr) specifically for Oxford Nanopore reads, as existing packages were incapable of assembling the long read lengths (5-50kbp) at such high error rate (between ~5 and 40% error). With this new method we were able to perform a hybrid error correction of the nanopore reads using complementary MiSeq data and produce a de novo assembly that is highly contiguous and accurate: the contig N50 length is more than ten-times greater than an Illumina-only assembly (678kb versus 59.9kbp), and has greater than 99.88% consensus identity when compared to the reference. Furthermore, the assembly with the long nanopore reads presents a much more complete representation of the features of the genome and correctly assembles gene cassettes, rRNAs, transposable elements, and other genomic features that were almost entirely absent in the Illumina-only assembly.