James Murdoch has relinquished control of his family's UK newspaper empire, stepping down as executive chairman of News International (NI).
Announcing the move, parent company News Corporation said it would allow him to focus on expanding the company's international TV businesses.
The announcement has been seen by many as a way of distancing Mr Murdoch from the scandal that has surrounded New Corp's UK newspapers.
He has faced intense scrutiny in the wake of the News of the World (NotW) phone hacking scandal and was noticeably absent at his father Rupert Murdoch's launch of the new Sunday publication of The Sun.
James Murdoch remains News Corporation deputy chief operating officer and keeps responsibility for BSkyB but NI chief executive Tom Mockridge, who was appointed after former NotW editor Rebekah Brooks was forced to resign because of phone hacking scandal, will now report to News Corp president and chief operating officer Chase Carey.
Rupert Murdoch, News Corp's chairman and chief executive officer, said: "We are all grateful for James' leadership at News International and across Europe and Asia, where he has made lasting contributions to the group's strategy in paid digital content and its efforts to improve and enhance governance programmes.
"He has demonstrated leadership and continues to create great value at Star TV, Sky Deutschland, Sky Italia, and BSkyB.
"Now that he has moved to New York, James will continue to assume a variety of essential corporate leadership mandates, with particular focus on important pay-TV businesses and broader international operations."
His 39-year-old son said: "I deeply appreciate the dedication of my many talented colleagues at News International who work tirelessly to inform the public and am confident about the tremendous momentum we have achieved under the leadership of my father and Tom Mockridge.
"With the successful launch of The Sun on Sunday and new business practices in place across all titles, News International is now in a strong position to build on its successes in the future. As deputy chief operating officer, I look forward to expanding my commitment to News Corporation's international television businesses and other key initiatives across the company."