Twenty-First Century Fox said Rupert Murdoch will hand over the chief executive reins at the entertainment conglomerate to his 42-year-old son James.
Rupert Murdoch, 84, will become executive co-chairman, along with his elder son Lachlan.
James is currently the co-chief operating officer of the company.
The company said the new changes are effective from 1 July.
It also said that Chase Carey will remain at the company for another year as vice chairman to support James and Lachlan Murdoch in their new positions running the media company.
The elevation of James, 42, and Lachlan, 43, has long been expected, and both brothers will now effectively take on Mr Carey's duties.
Fox said that all corporate functions including the company's TV and film divisions will report jointly to James and Lachlan.
While James and Lachlan are said by company sources to have a good relationship and approach the business as partners, the dual-reporting line could prove to be confusing to management.
Mr Carey confirmed he is staying with the company to help support the Murdoch brothers. That will no doubt calm some investors, who want the highly regarded executive and a non-family member to remain with Fox.
Mr Carey, 61, has been the company's president and chief operating officer since 2009 and will serve as its executive vice chairman up to next June, when his contract ends.
Shareholders have warmed to the idea of James and Lachlan taking a bigger role with Fox.
In 2013, the vast majority of independent investors did not vote for James and Lachlan as directors.
The tide turned in 2014 when only 24% of independent stakeholders opposed the board nominations of James and Lachlan.
"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.
"Lachlan and James are each talented and accomplished executives and together, we, as shareholders and partners, will strive to take our company to new levels of growth and opportunity at a time of dynamic change in our industry."
James is currently co-chief operating officer and Lachlan is currently co-chairman of the company.
