James Murdoch will step down as executive chairman of News International.
A statement released by parent company News Corporation said the move would allow him to focus on the company's growing international TV business.
After the News of the World phone hacking scandal, Mr Murdoch has faced intense scrutiny. The newspaper was shut down in July last year.
Mr Murdoch will continue in his role as deputy chief operating officer of parent group News Corporation.
Rupert Murdoch, News Corporation'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.
"James will continue to assume a variety of essential corporate leadership mandates."
James Murdoch found himself at the centre of the hacking scandal after it was claimed that he had been told that hacking was widespread at the News of the World.
He had told the Commons Culture Committee he was not aware of the "For Neville" document existed.