Mr Murdoch's decision to elevate his son further up the corporate ladder came when Ken Cowley, one of his longest-serving lieutenants, stepped down as executive chairman of News Limited, the Australian subsidiary of News Corporation.
The retirement of Mr Cowley, 62, after 33 years serving the Murdoch empire, paves the way for Lachlan Murdoch, 25, to broaden his role in the empire against competition from his elder sister, Elisabeth, 28, who is considered a rival to succeed their father eventually.
Lachlan Murdoch has had a meteoric rise in News's Australian operations since his father sent him there to learn the businesses of newspapers and television two years ago.
After a year as general manager of Queensland Newspapers, a subsidiary in Brisbane, he moved to Sydney where he was promoted to managing director of News Ltd last September and appointed to the News Corporation board.
He takes over at a crucial time with News Corporation expanding its Australian interests through pay TV and the building in Sydney of a film production studio by Twentieth Century Fox, a News Corp arm.