Robert Thomson, the Editor of The Times, will step down from his position next week and move to New York to become publisher of the company that owns The Wall Street Journal.

His successor will be James Harding, 38, at present the business and City editor. Mr Harding, who joined the newspaper in August last year, will take the Editor’s chair on Wednesday.

Speaking to a packed newsroom yesterday afternoon, Mr Thomson said that it had been “a privilege to be a custodian of The Times in its various forms and it has been a privilege to share in the obvious achievements of Times journalists”.

Mr Thomson, 46, has been Editor since March 2002, during which time he took the 222-year-old newspaper from a broadsheet to a compact format, presided over an expansion of online operations and overtook The Daily Telegraph in full-price newsstand sales. The Times has also moved into profitability for the first time in its recent history.

“The parting is always a complicated moment for hardened journalists, who work with words and are acutely conscious that the profound and the prosaic are but a few syllables apart,” Mr Thomson said. “In short, I will be finishing my tenure as Editor of The Times on Tuesday evening.”

Rupert Murdoch, the chief executive of News Corporation, said: “Under Robert Thomson’s leadership, The Times has gone from strength to strength and I am confident James is the editor to build on Robert’s success. James has enjoyed an outstanding career as a correspondent and editorial executive. His experience working in Britain and around the world equips him ideally to take on the job of editing The Times.”

James Harding was educated at Trinity College, Cambridge, and started his career in journalism in 1994. He joined the Financial Times as a companies reporter, then helped to open the Shanghai bureau for the specialist newspaper before becoming media editor and finally Washington bureau chief. He speaks Japanese, Chinese, French and German.

Mr Harding said that he had read that morning in his old newspaper that The Times was Britain’s most powerful newspaper and he added that under Mr Thomson’s editorship the daily was “the most enterprising, most challenging, most exciting and most interesting newspaper”.

Mr Thomson’s departure had been expected after News Corporation, the parent company of The Times, reached agreeement to take control of Dow Jones, the company that owns The Wall Street Journal. Closely involved in the negotiations, Mr Thomson was an obvious candidate to help to run the business.

News Corporation hopes to complete the takeover of Dow Jones at the end of next week and Mr Thomson will take commercial charge of The Wall Street Journal, the magazine Barron’s, the Dow Jones Newswires and the website marketwatch.com.

Les Hinton, the executive chairman of News International, the UK parent company of The Times, will also leave for New York to become the chief executive of Dow Jones. His responsibilities will be taken up by James Murdoch, the chief executive of BSkyB, who is to take on a broader role as chairman of all News Corporation’s European and Asian operations.

The elevation of Mr Harding has been approved by the independent directors of Times Newspapers Holdings Ltd, who must agree the appointment of editors of The Times and The Sunday Times under arrangements dating back to the 1960s aimed at safeguarding the editorial independence of the newspapers.

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