The party would also produce stricter rules on media ownership and back independent regulation of the press, shadow culture secretary Ivan Lewis said.
In a message to Rupert Murdoch, Mr Lewis said: "The integrity of our media and our politics is not for sale."
Mr Lewis acknowledged that links between Labour and Mr Murdoch's papers, which include the Sun, Times and the now defunct News of the World, had been "complex and tortuous".
"But what can never be complex or tortuous is the responsibility of politicians to stand up in the public interest without fear or favour," he said in his speech to the Labour Party conference.
Following the revelation that the NotW hacked the phone of murdered schoolgirl Milly Dowler, political pressure on the paper's parent company News International forced it to abandon plans to buy the shares in BSkyB it did not own.
Setting out his reforms Mr Lewis said: "Never again can one commercial organisation have so much power and control over our media.
"In the period ahead, Labour will bring forward proposals for new, tougher cross-media ownership laws."
While a free press was "non-negotiable", Mr Lewis said: "We need a new system of independent regulation, including proper, like-for-like redress which means that mistakes and falsehoods on the front page receive apologies and retraction on the front page.
"And as with other professions, the industry should consider whether people guilty of gross malpractice should be struck off."
In a message to Mr Murdoch, he said: "Your newspapers and Sky TV are popular with millions of British people.
"Some people in our movement might find that uncomfortable, but it's true.
"However - and we should have said this a long time ago - Mr Murdoch: never again think you can assert political power in pursuit of your commercial interests or ideological beliefs.
"This is Britain, Mr Murdoch, the integrity of our media and our politics is not for sale."
Delegates at the gathering in Liverpool were asked to back a motion calling for Mr Murdoch's son James to stand down as chairman of BSkyB.
Labour MP Tom Watson, who has led the campaign over phone hacking in Parliament, said: "Let's tell Ofcom what we think about James Murdoch. I wouldn't put him on the board of an ornamental garden.
"He's certainly not a fit and proper person to chair a major broadcaster."
Labour should feel a sense of "shame" for its close links to News International under the leadership of Tony Blair and Gordon Brown, the conference heard.
Unite general secretary Len McCluskey, who moved the motion delegates will vote on later in the conference, said: "There is no one in this hall, or indeed in the country, who will not have felt revulsion at the revelations of this summer regarding the activities of News International journalists.
"For our party, there should also have been an element of shame because for years we were complicit in propping up Murdoch's power."
He added: "We shouldn't have waited until the revelations that his papers were hacking the phones of murdered schoolgirls to have recognised the poison in our midst."
In an attack on Mr Blair, he said: "The Labour Party needs to learn lessons - and they won't be learned by standing down by the banks of the Jordan blessing Murdoch's children.
"They will be learned by setting up the two commissions called for in this motion. One is for an overdue look at the rules controlling media ownership and the unacceptable concentration of power, of which the Murdoch empire is the worst example.
"And the second is to look at a still wider question - how independent trade unions are essential in ensuring that the rich and powerful do not get it all their own way. That they do not control our politics without the slightest counter-balance in society as a whole."
Mr Watson, a member of the Culture Select Committee, compared the Sun's coverage of the Hillsborough tragedy to the phone-hacking row which led to the closure of the News of the World.
He said: "Why have those Hillsborough families still not received the justice they deserve? Police failure, a newspaper out of control, politicians failing to act.
"After two years of investigating, I can tell you how the hacking scandal happened: a newspaper out of control, police failure, politicians failing to act. It's the same.
"When he saw what the Sun did, the lies they invented about Liverpool fans stealing from the dead, Rupert Murdoch could be in no doubt, if ever he was, what went on at his newspapers."
He alleged that hacking was not just confined to the News of the World and said Labour had allowed the Murdochs to become "too powerful".
Mr Watson called for Lord Leveson's inquiry into the scandal to call in private investigators who worked for newspapers.
Rhondda MP Chris Bryant, an outspoken critic of News International, admitted Labour became too close to the company during the party's 13 years in government.
He told the conference: "In future we should choose our bed fellows with a little more care."
Liberal Democrat media spokesman Don Foster, said: "It is clear that self-regulation of the press has failed spectacularly and we need to put this right, but Labour's plan for an official register is deeply flawed.
"It is muddled, completely unworkable and has worrying implications for Labour's view of a free press. From your cousin's occasional blog to some of the most respected journalists, all would be at risk of censure.
"Liberal Democrats have set out a clear, sensible plan for the future of media regulation and will be working to use this to put the media back on a sure footing."
Responding to Mr Watson's comments, a News International spokesman said: "Everyone should act responsibly regarding the current investigations to allow the police to get on with their important work.
"If Mr Watson has specific information he should immediately hand it to the police and we urge him to do so. We are not aware of any evidence that The Sun engaged in activity as suggested by Mr Watson."
Source: PA
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