The announcement confirms CNBC's earlier report about succession at Fox. Rupert Murdoch—the company's founder—will stay on as an executive co-chairman along with his son Lachlan. President and Chief Operating Officer Chase Carey will become executive vice chairman.
"It has always been our priority to ensure stable, long-term leadership for the company, and these appointments achieve that goal," Rupert Murdoch said in a statement.
James Murdoch is seen as crucial to driving the media empire's evolution through the digital landscape.
With Carey's move, the company will be without senior management outside the family for the first time. Former COO Peter Chernin had filled that role before Carey.
James Murdoch previously served as co-chief operating officer at Fox. He was responsible for the company's cable and broadcasting properties. He left his job running BSkyB after the U.K. hacking scandal engulfed the company four years ago.
Rupert Murdoch controls about 39 percent of voting shares at Fox through the Murdoch Family Trust.
—CNBC's David Faber contributed to this report.