James Murdoch has resigned from his role as chairman of UK broadcaster BSkyB, but will remain on the board.
The move is part of an effort to distance that company from the phone-hacking scandal at the News of the World newspaper, once a Murdoch title.
It means he no longer has a major role at a UK company. He also stood down as chairman of the newspaper publisher, News International, last month.
His father Rupert founded its parent company, News Corporation.
News Corporation had to drop its plans to take over the 61% of profit-making BSkyB it does not own as the hacking scandal began to gather momentum.
James Murdoch said in a statement that he did not want BSkyB to be undermined by "matters outside this company".
Sources told Robert Peston, the BBC's business editor, that it was Mr Murdoch's own decision to leave.
Mr Murdoch said on Tuesday: "As attention continues to be paid to past events at News International, I am determined that the interests of BSkyB should not be undermined by matters outside the scope of this company.
"I am aware that my role as chairman could become a lightning rod for BSkyB and I believe that my resignation will help to ensure that there is no false conflation with events at a separate organisation."
News International shut down the News of the World last July due to a storm of allegations of widespread wrongdoing, including the hacking of the phone of murdered schoolgirl Milly Dowler.
Our correspondent says that Mr Murdoch has been braced for serious criticism of his stewardship of News International by the Commons Culture, Media and Sport select committee.
However, he adds that his resignation has not been prompted by any advance knowledge of the report into hacking due for release soon by the committee.
John Whittingdale, chairman of the committee, told Sky News its final report is taking so long to produce because it is a "developing saga".
"I certainly would hope we would be able to publish it perhaps by the end of the month but I don't want to put a firm date on it," he said.
"Obviously these are matters which are very important, we are having a full discussion and debate about them and we are endeavouring to reach conclusions that all of us will sign up to."
The Labour leader, Ed Miliband, said James Murdoch's decision to resign was "probably the right thing to do".
But he said News Corp had more to do to clean up its reputation, and that the issues there "go beyond one person".
"They are now about how the organisation can restore public confidence from top to bottom, seeing what happened... and having a clear-out of those people who did wrong."
'Fool or knave'
The media commentator Steve Hewlett said that the resignation dented James Murdoch's chance of eventually taking over from his father as the head of the parent company, News Corporation.
"The problem for James has always been he is either a fool or a knave. If he didn't know [about phone hacking] and is therefore innocent - he should have done.
"Now he is no longer chairman of BSkyB the chances of him being that person is much reduced."
It was announced last month that he had moved to New York to work on News Corp's pay-TV businesses around the world.
There is also a review being conducted by Ofcom, the media regulator, of whether BSkyB is fit and proper to continue holding a broadcasting licence.
News Corp owns 39% of BSkyB and had wanted to buy the whole of the firm.
'No blind eye'
James Murdoch, who is deputy chief operating officer at News Corp, has repeatedly denied knowing about phone hacking at the News of the World.
He said in a letter to the culture committee last month that he accepted his share of the blame for not uncovering phone hacking at the News of the World sooner but denied he had turned a "blind eye" to allegations of criminal wrongdoing.
A representative of the Hacked Off campaign group, which helps victims of phone hacking, said the change in role did not get those affected nearer to the truth about what happened.
"It's quite clear that this is, as befits a news family, a form of news management," said Evan Harris, a former Liberal Democrat MP and member of the group.
"But I repeat - what the victims that Hacked Off seeks to represent want is the full story to come out and not just people leaving a small fraction of their income behind as they go on to other parts of the business," he told BBC News.
Nicholas Ferguson, who has been with the company since 2004, will take over as chairman of BSkyB.
He was the senior independent non-executive director and deputy chairman.
He is also the chairman of SVG Capital, a publicly-quoted private equity group, and of the Courtauld Institute of Art and the Institute of Philanthropy.