The agreement ends a family brawl over who will control one of the highest-profile global media groups and puts to rest questions of succession within the Murdoch family after its patriarch's death.
The drama is considered to be one of the inspirations for the television series Succession, about the infighting of the members of a media dynasty. Its real-life resolution preserves the conservative tilt of Murdoch's media outlets.
Under the deal, Rupert's children James Murdoch, Elisabeth Murdoch and Prudence MacLeod will receive cash from the sale of about 16.9 million shares of Fox Class B voting stock and about 14.2 million shares of News Corp's Class B common stock. The amount of the payment was not disclosed.
One source said each of the children is expected to receive about $US1.1 billion ($A1.7 billion) in proceeds.
They agreed to sell their personal holdings in Fox and News Corp over a period of six months, according to the announcement on Monday, US time.
A new family trust will be created to benefit Lachlan Murdoch and his younger siblings, Grace and Chloe Murdoch, who are Rupert Murdoch's children from his marriage to Wendi Deng Murdoch.
This trust, worth about $US3.3 billion ($A5 billion), according to the source, will hold 36 per cent of Fox's Class B common stock and 33 per cent of News Corp's Class B shares, according to the companies' statements.
A battle over Rupert Murdoch's global television and publishing empire played out in 2024 in a Nevada courtroom, where a judge considered the contentious matter of succession.
Murdoch, 94, attempted to change the terms of the family's trust, which was set up after his 1999 divorce from his second wife, Anna, and holds significant stakes in Fox News parent Fox and Wall Street Journal owner News Corp.
Under the original trust, News Corp and Fox voting shares would have been transferred to his four oldest children – Prudence, Elisabeth, Lachlan and James — upon Rupert Murdoch's death.
Murdoch worried that three of his heirs, James, Elisabeth and Prudence, could mount a coup to oust Lachlan, who serves as executive chairman of Fox and chairman of News Corp.
The patriarch proposed an amendment to the trust that would block any interference by Lachlan's siblings, who are more politically moderate, according to the New York Times, which obtained a sealed court document detailing the succession drama.
A Nevada probate court rejected that plan in December, saying Rupert and Lachlan Murdoch had acted in "bad faith" in seeking to amend the irrevocable trust. That decision created a fresh opening for settlement talks, according to the source.
Fox News continues to be the number one US cable news network, playing an influential role in American politics, particularly among Republicans who prize its conservative-leaning audience.
"You know that there will always be a conservative guardian of Fox News. And frankly, if I were a shareholder. I would really think this was a very good move," said Claire Enders, chief executive and founder of UK-based media research firm Enders Analysis.
