Would "newsletter" be an appropriate alternative translation here?
That's exactly what I was thinking, you can't have a yearly newspaper, it defeats the point of publishing "news". But a newsletter could definitely be annual.
Is עיתון שנתי how one would say yearbook?
No. That would probably be ספר מחזור.
Thanks. I wasn't sure whether this was not just a set phrase.
Ze ha-iton ha-shnati shel beit ha-sefer.
"... yearly newspaper of the school" should also be accepted.