Fox is investing dollars 500m in New World, which will switch up to 12 stations from ABC, CBS and NBC to Fox. New World also produces such series as The Wonder Years and Santa Barbara.
Mr Murdoch, chairman and chief executive of Fox, said it was an unprecedented broadcasting alliance that meant the largest network affiliation realignment in television history.
'This agreement will forever change the competitive landscape of network television. This is a giant step toward levelling the playing field and toward the longstanding public policy goal of achieving a fully competitive, fourth broadcasting network for America.'
The seven-year-old Fox network has already surprised the more established networks by buying the rights to broadcast the NFL's National Football Conference games during the next four years.
Fox and New World intend to develop syndicated programming that will run on both the Fox and New World stations. They will also develop prime-time series and movies for Fox Network.
William Bevins, chief executive of New World, said the alliance made his company one of the leading syndicated programme providers.
'That, plus significant access to the Fox network for our series and movie programmes, puts us in the leading ranks of television production firms.'
All five of New World's VHF stations are switching to Fox, as will four stations it plans to buy from Great American Communications. New World plans to buy the maximum number of stations allowed under US multi-ownership rules.
Half of Fox's dollars 500m investment is in non-voting convertible shares. If Fox exercises its conversion privilege, it will eventually own 20 per cent of New World.
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