Murdoch has faced criticism by some over his handling of the phone hacking scandal, which led to the closure of the News of the World last July.
Murdoch will remain as deputy chief operating officer of parent business News Corporation.
According to News Corp the move follows Murdoch’s relocation to News Corp’s headquarters in New York and the launch of the Sun on Sunday, which sold over 3 million copies this weekend.
James’ father, Rupert Murdoch, chairman and chief executive at News Corp, said his son would “continue to assume a variety of essential corporate leadership mandates”, with a particular focus on the company’s broader international operations.
He adds: “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 programs.
“He has demonstrated leadership and continues to create great value at Star TV, Sky Deutschland, Sky Italia, and BSkyB.”
James Murdoch added that he was now able to focus on growing News Corp’s roster of TV stations.
“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.”