Rupert Murdoch signalled a seismic shakeup of his global media empire last night, putting his son James in pole position to succeed him and moving the editor of the Times and the chairman of his UK newspaper arm to oversee his Wall Street Journal acquisition.

In a series of dramatic moves expected to be confirmed today, James Murdoch, 34, will stand down as chief executive of BSkyB and take up a new role overseeing all News Corp's media operations in Europe and Asia.

Simultaneously Robert Thomson, the editor of the Times, will move to New York to become publisher of the Wall Street Journal, replacing Gordon Crovitz, when Murdoch's audacious swoop for parent company Dow Jones closes next week.

Thomson's move was widely predicted but the announcement of News International chairman Les Hinton, a respected fixture in the UK newspaper market and one of Murdoch's most trusted lieutenants, as chief executive of Dow Jones was more of a surprise.

Hinton, executive chairman of News International, holding company for the Times, Sunday Times, Sun and News of the World, has been a huge influence on the British newspaper empire and plays a key role in appointing editors and deciding strategy.

The move was triggered yesterday when Dow Jones's chief executive, Richard Zannino, announced he would leave the company when the acquisition by News Corp is approved on Wednesday.

James Murdoch will take control of his father's UK newspaper empire, ticking the one box he lacked in terms of experiencing the spread of a global corporation that began with a modest family Australian newspaper business.

James's role in charge of News Corp's European and Asian assets will also give him control of Sky Italia and the Star TV network in Asia. He will also take over from his father as non-executive chairman of BSkyB, where he is considered to have done a good job in his four years at the helm.

He has boosted subscriber numbers when most expected them to stall, expanded into broadband and pushed the company's green credentials. As well as shoring up its position as a provider of premium movies and sport, he has broadened the company's appeal.

But he has also shared his father's knack for provocation, swooping for a 17.9% stake in ITV in a move that enraged rival Virgin Media and could yet lead to sanctions by the regulatory authorities he has frequently railed against.

Rupert Murdoch's decision to step down as chairman of Sky breaks his formal link with the company on which he bet the farm in 1989 and almost went bankrupt as a result before going on to revolutionise British broadcasting.

Jeremy Darroch, the current Sky finance director, will take over as chief executive. BSkyB sources were keen to stress that the impetus for James to remain as chairman came from the non-executive directors on the board such as Lord Rothschild and Lord Dinton rather than him or his father.

Thomson, who has been in the Times editor's chair since 2002 after being lured from the Financial Times, played a key role in the acquisition of the Wall Street Journal. Murdoch enlisted him to help persuade the Bancroft family that he would not interfere in day to day editorial matters.

The frontrunner to replace him is James Harding, the Times business editor, who is known to be close to James Murdoch.

Steven Yount, president of the staff union at Dow Jones, told the Guardian that there was little surprise in the newsroom at the change: "It was only a matter of time - if you spend $5bn buying something, you want to put your own man in to run the thing."

He said he hoped that Hinton and Thomson would invest in content. "I certainly hope that there is an unshakeable commitment to the excellence and quality of journalism that the Journal's been known for hundreds of years," he said. Employees at Dow Jones have expressed concern about editorial independence under Murdoch.

Lachlan Murdoch, James' elder brother, was considered the most likely heir but dropped out of the race in 2005. His sister Elisabeth runs her own successful independent production company, Shine. News Corp refused to comment last night.