In a letter to the BSkyB board, Murdoch said he resigned because of the negative publicity surrounding News Corp, a part owner of BSkyB.
News Corp's British newspaper arm, News International, is under investigation in the hacking scandal.
Murdoch, the son of media mogul Rupert Murdoch, said his resignation will help ensure there is no confusion "with events at a separate organization."
Earlier this year, James Murdoch resigned as chairman of News International. He has denied any knowledge of widespread phone hacking allegedly carried out by News International's tabloid, "News of the World", which is at the center of the scandal that surfaced last year.
Rupert Murdoch shut down the 168-year-old "News of the World" tabloid after allegations that staff and editors obtained information by hacking into mobile phones and email accounts. Murdoch also owns British newspapers "The Times", "The Sun" and "The Sunday Times".
Victims of the phone-hacking include celebrities, politicians and crime victims.
Rupert Murdoch's media empire has agreed to pay large payouts to 37 phone-hacking victims, including British actor Jude Law, football (soccer) player Ashley Cole and former deputy prime minister John Prescott.
About 40 people have been arrested as a result of probes into the illegal news gathering and bribery scandal.
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