Murdoch, pictured here at the Culture, Media and Sport select committee, is expected to appear before the Leveson inquiry
James Murdoch is to step down from his position as chairman of British Sky Broadcasting (BSkyB).
He will remain on the board but will relinquish his position as non-executive chairman of the broadcaster, of which News Corporation owns minority stake.
In a letter to the board giving reasons for his resignation, Murdoch said: "As attention continues to be paid to past events at News International, I am determined that the interests of BSkyB should not be undermined by matters outside the scope of this company.
"I am aware that my role as chairman could become a lightning rod for BSkyB and I believe that my resignation will help to ensure that there is no false conflation with events at a separate organisation."
James Murdoch, who is a former chief executive of BSkyB and board member since 2003, was facing pressure step down as chairman due to questions as to what he knew about phone hacking at News of the World.
The decision comes ahead of an expected appearance before the Leveson inquiry and the publishing of a report by the Culture, Media and Sport select committee, which has questioned James Murdoch on two occasions – one of which was alongside his father, Rupert Murdoch.
At the end of February News Corporation announced that James Murdoch had stepped down as executive chairman of News International, publisher of the Sun, Times, Sunday Times and the now-defunct News of the World, following a move to New York.
At the same time as leaving his position at News International he took up a new role as deputy chief operating officer with parent company News Corporation expecting to focus on "the international television businesses and other key initiatives across the company".
BSkyB is currently facing a "fit and proper" test by Ofcom, to assess whether the broadcaster should still hold a broadcast licence in its current form in the wake of the phone-hacking scandal.
When the Financial Times obtained minutes last month from BSkyB board meetings and they were published, it was revealed that James Murdoch could be forced to step down from BSkyB board and News Corp told to sell off a proportion of shares in the broadcaster of it fails the test.
Sky News broke the news of Murdoch stepping down as chairman around 1pm, with City editor Mark Kleinman saying "Nicholas Ferguson to replace Murdoch as BSkyB chairman with immediate effect".
Ferguson was appointed to the board in 2004 and previously served as deputy chairman and senior independent non-executive director.
Tom Mockridge, who has been appointed deputy chairman, said in a statement that it was an "honour to be elected" to the role, "although it is disappointing this event is triggered by the change of role of James Murdoch."
Update - 2.30pm: BSkyB confirmed board changes
Free daily newsletter
If you like our news and feature articles, you can sign up to receive our free daily (Mon-Fri) email newsletter (mobile friendly).
