Rebekah Brooks has been appointed chief executive of News UK, publisher of The Sun, The Times and Sunday Times newspapers.
The announcement confirms the return of the former Sun editor to the leadership of Rupert Murdoch's British media empire after she was cleared of all charges in the phone-hacking trial last year.
Former Daily Telegraph editor Tony Gallagher will become editor of The Sun, Britain's largest-selling daily newspaper, the company said.
Ms Brooks takes charge from next Monday.
Robert Thomson, chief executive of parent company News Corp, said: "Her expertise, excellence and leadership will be crucial as we work to extend our relationship with readers and advertisers, and develop our digital platforms to take full advantage of our brilliant journalism."
Ms Brooks said: "I am delighted to return to News UK. It is a privilege to be back amongst the most talented journalists and executives in the business.
"I am confident that we can meet the many challenges of this digital age with a combination of cutting edge technologies and world class journalism."
Reports that surfaced over the weekend of her imminent appointment - four years after she left News UK's predecessor News International - have already been met with "incredulity" by the Hacked Off campaign.
Normal rules 'simply do not apply'
Evan Harris, joint executive director of Hacked Off, said: "This could only happen in a dynastic company where normal rules of corporate governance simply do not apply."
Ms Brooks, former editor of the now-defunct News Of The World, was cleared of all charges following the 138-day hacking trial at the Old Bailey, as was Stuart Kuttner, the former managing editor of the Sunday tabloid.
But Andy Coulson, another former editor of the newspaper who went on to become David Cameron's director of communications, was convicted and handed an 18-month prison sentence.
Former News Of The World journalists Greg Miskiw, Neville Thurlbeck, James Weatherup and Ian Edmondson pleaded guilty to their role in the hacking, along with private detective Glenn Mulcaire.
Shadow culture secretary Chris Bryant - who was himself a victim of News Of The World phone-hacking - said: "Rupert Murdoch has just stuck two fingers up to the British public and the thousands of people whose phones were hacked by News International.
"Hundreds of ordinary journalists lost their jobs when Mr Murdoch closed the News Of The World, but it seems Rebekah Brooks is to get very special treatment.
"This decision is ludicrously premature when the Crown Prosecution Service is still considering corporate charges against News Corp, when the House of Commons Privileges Committee has still to rule on whether three News Corp executives lied to Parliament, as claimed by the Culture Media and Sport Select Committee when it was chaired by John Whittingdale, and when the Leveson Inquiry has to still to complete the second part of its work into the events at the News Of The World."