News Corp's Australian media businesses would not be split under Rupert Murdoch's plan to demerge the global media empire into two separate companies.
And Mr Murdoch has played down speculation he is clearing the way for a return of his eldest son Lachlan to the family business.
News Corp's board has approved a plan to split its newspaper and book publishing business from its faster-growing movie and televisions operations.
The global media group said in a statement that the publishing company would include its Australian newspapers - including The Australian, The Herald Sun and The Daily Telegraph - plus its other Australian assets.
That includes a fifty per cent stake in Fox Sports and 25 per cent of Foxtel.
News Ltd, News Corp's local arm, recently offered to buy Consolidated Media's interests in those television assets, which if successful would see News Ltd take full control of Fox Sports and half of Foxtel.
The split of the global media empire is expected to take 12 months.
"We've come a long way in our journey that began nearly 60 years ago with a single newspaper operating out of Adelaide," Mr Murdoch said in New York overnight.
He denied the move was a reaction to the phone hacking scandal in the UK or the financial troubles facing the newspaper industry.
"We are not doing this in any sense of a reaction to what went on in the UK or Australia or anywhere else," he said.
Mr Murdoch will be chief executive of the entertainment company, and retain his position as executive chairman of both the entertainment and publishing operations.
With no chief executive named for the publishing company, analysts have said the position may have been left open for Lachlan Murdoch, who departed the News Corp business in 2005 and is currently chairman of the Ten Network.
But his father has said that was "highly unlikely".
"Lachlan is very happy running his own businesses in Australia and loves living there, so we'll see," Mr Murdoch told Fox Business in the US.
He also dismissed speculation the new publishing business would be based in Australia.
Mr Murdoch has also given his support to local rival Fairfax, which is undergoing radical changes in response to falling revenues.
"It would be a nightmare if that closed down because it would leave us in a monopoly situation which is the last thing we want," he told Bloomberg TV.
