Carey has been named as News Corp deputy chairman, taking over for Chernin, Murdoch's long-time right hand man and News Corp chief operating officer, who announced his departure in February.
News Corp initially said it would not look to replace Chernin, who declined to renew his contract with the company, instead striking a film production deal with News Corp's 20th Century Fox studio.
Carey will join News Corp on July 1 as deputy chairman, president and chief operating officer and will oversee the company's global business.
Murdoch called Carey one of his "closest advisors and friends" and was "delighted we'll once again be working together across our businesses as we face the challenges and great opportunities ahead".
Carey has lead DirecTV since 2003 to a considerable growth in cash flow and subscribers during his six year stint at the satellite television firm. His departure leaves a vacuum at the top of the company, especially as his contract with DirecTV was expected to run until the end of 2010.
DirecTV is presently in merger talks with its main shareholder Liberty Media, which are expected to go ahead in Carey's absence.
Murdoch relinquished its controlling stake in DirecTV to Liberty Media last year, in exchange for Liberty Media's stake in News Corp.
Prior to DirecTV, Carey spent 15 years at News Corp, which included a stint as co-chief operating officer, helping to launch the company's Fox Sports channels and News Corp's satellite operations across Europe, Asia and Latin America.
Carey joined Fox in 1988, serving numerous roles, and is also the former CEO of Sky Global Networks. Prior to joining News Corp he worked at Columbia Pictures in senior roles from 1981 to 1987.
Carey said: "Under Rupert's leadership, News Corporation has always been the boldest, most innovative media company in the world. With its leading franchises, News Corporation's growth opportunities are second to none and I am thrilled to be returning at such a transformative time for our businesses across the globe."