Febuxostat is a non-purine-selective inhibitor of xanthine oxidase. It works by non-competitively blocking the molybdenum pterin center which is the active site on xanthine oxidase. Xanthine oxidase is needed to successively oxidase both hypoxanthine and xanthine to uric acid. Hance, febuxostat inhibits xanthine oxidase, therefore reducing production of uric acid. Febuxostat inhibits both oxidised as well as reduced form of xanthine oxidase because of which febuxostat can't be easily displaced from the molybdenum pterin site.
Reference: Tripathi KD; Essentials of Clinical Pharmacology; Jaypee Brothers Medical Publishers; seventh edition; Page no: 213