Victoria Newton has been appointed as editor of the Sun, at a time when the tabloid is struggling to retain its title as the UK’s biggest-selling print newspaper and build its online audience in a battle with MailOnline.

Newton was most recently editor of the Sun on Sunday and will take up her new job managing all of the Sun’s print and online outlets next week. The move is part of a reshuffle at the top levels of Rupert Murdoch’s News UK, with the outgoing Sun editor, Tony Gallagher, becoming deputy editor of the Times after four years at the tabloid.

Newton, a former deputy editor of the News of the World, will inherit a print newspaper with a headline circulation of 1.2m copies a day and falling, well down on the 3m copies it sold only a decade ago. The focus is likely to be on growing the audience of the Sun’s website and apps, with its digital editor, Keith Poole, promoted to become Newton’s deputy.

The paper has sent a small number of staff to New York to launch a US version of the Sun, attempting to eat into the audience for celebrity news and royal coverage that has proved to be a success there for MailOnline. The Sun already claims to be biggest commercial news website in the UK, although its audience figures are disputed by MailOnline, which says it has a larger number of regular readers who spend longer on the site.

Facebook Twitter Pinterest A man reads a copy of the Sun announcing the decision of the Duke and Duchess of Sussex to step back from the royal family last month. Photograph: Facundo Arrizabalaga/EPA

Gallagher’s future had been the source of speculation within the Sun newsroom for several months, with some reporters feeling the former Daily Telegraph editor was better suited to a more politically focussed publication than the Sun. Gallagher replaces Emma Tucker who recently moved to become editor of the Sunday Times, part of a decision to share resources between the Times and its Sunday sister title to cut costs.

Page 3, puns and politics: has the Sun lost its shine? Read more

News UK continues to face heavy financial losses at the division that owns the Sun, with income falling amid the collapse in print circulations and the continued cost of historical phone-hacking claims, which are eating up about 15% of revenue. Along with the Mirror, the company is gearing up to deal with a hacking claim brought by Prince Harry, in what could be an awkward moment for the newspaper.

News UK is continuing to invest in its radio division, having hired Chris Evans to present the breakfast show on Virgin Radio and announcing plans to launch a national station called Times Radio in an attempt to challenge for the BBC’s talk radio audience.