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Murphy will retain his existing role, but also take over responsibility for future strategy of the entire Sky Entertainment portfolio of channels: Sky Atlantic, Sky Arts, Sky1 and Sky Living.
The controllers of each channel - Jane Johnson (Sky Living), James Hunt (Sky Arts) and Naomi Gibney (Sky Atlantic) - will now report to Murphy, who will continue to report to Sophie Turner Laing, the managing director of entertainment, news and broadcast operations.
Sky has pledged to up its investment in home-grown programming by 50% to £600m by 2014. Forthcoming new British content includes another Sir David Attenborough 3D documentary, Kingdom of Plants, and entertainment shows Sinbad, Starlings, Hit and Miss and Playhouse Presents.
"Over the past three years, under Stuart's leadership, we have seen Sky1 become a true destination channel, offering our customers some of the finest drama, comedy and entertainment programmes on television at the moment," said Sophie Turner Laing.
"I have no doubt that in his new role, he'll bring the same vision and drive to the rest of the portfolio, working with the team to look at the next steps for the rest of our - first class - entertainment channels."
Murphy said that he was "properly excited" about the opportunity to oversee Sky Entertainment.
"Getting Sky1 HD to where we are today was a real team effort and I can't wait to work with Sophie, the channel heads, the commissioning heads and the indie community to look at how we take the entertainment channels to the next phase," he said.
Alongside overseeing Sky Arts, James Hunt will also now become director of entertainment production, assuming the responsibility from Barbara Gibbon, who has joined Sky Creative as a production director.
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