The shift in leadership comes after last December's announcement that the Walt Disney Company plans to acquire many 21st Century Fox assets in a $52.4 billion deal, which is now pending approval - though rival media giant Comcast has threatened to derail the merger.
"New Fox", as it has been called, will include the company's major TV channels: Fox News, Fox Business Network, Fox broadcasting and the sports cable networks FS1 and FS2, among others. He is expected to leave the company.
"I am also personally very pleased that John has agreed to take on the role of Chief Operating Officer, and together we look forward to making further announcements as to the management and structure of this new Fox as we get closer to closing our proposed transaction with Disney", Lachlan Murdoch added.
Another drama playing out has 21st Century Fox trying to acquire the 61 percent of Sky it doesn't already own, though European regulators have been dragging their collective feet deciding on the appropriateness of that deal.
Fox agreed a year ago to sell the bulk of its film and TV assets to Walt Disney in a $52.4 billion deal.
Lachlan said: "We have worked through the winter 'standing up" a reimagined independent Fox.
Current 21st Century Fox CFO John Nallen will serve as the CFO of the new Fox.
The Disney purchase is still pending approval from shareholders and regulators, and recent news has cast the fate of the Fox assets in doubt. Plus, Comcast recently said it wants to buy all of Sky for $31 billion.
After Lachlan Murdoch essentially left the family media empire in 2005, the answer appeared to be James. "I look forward to joining Lachlan as we begin to establish new Fox".
In recent months, James has distanced himself from the politics espoused by his father and the company's flagship channel, Fox News. Some of Fox News' most-watched shows are also pro-Trump. Speculation about James at the time of the deal centered on a possible role at Disney, where CEO Bob Iger's contract had been slated to end in 2019, and an heir apparent was not in place.
The Wall Street Journal, owned by the Murdoch publishing company News Corp, has reported that he intends to set up a venture capital fund to invest in media and technology start-ups.