Thomson will hold the positions of managing editor and editor-in-chief of Dow Jones, the News Corporation unit that publishes the Journal. He was tipped to take the job last month.
Thomson's appointment is expected to lead to bigger changes at the Journal, as part of a plan to compete more directly with The New York Times.
The paper has already seen a shift in focus since the News Corp acquisition, putting more emphasis on shorter news stories and general news as well as political stories.
The move goes against what Murdoch said a year ago after he bid for the paper, when he said he would not be moving editors from other parts of his media empire to the WSJ.
Thomson had been made publisher when News Corp completed the Dow Jones deal, after nearly six years as editor of The Times in London.
Previously, he had been editor of the US edition of the Financial Times for four years, following a period as a correspondent in Beijing and Tokyo.
Murdoch said: "Thomson's outstanding career as a financial journalist, foreign correspondent and editor equips him perfectly for the position."
Thomson's appointment will lead to a restructuring of reporting lines within Dow Jones.
He will oversee the news pages of The Wall Street Journal as well as the editorial operations of Dow Jones Newswires.
Neal Lipschutz, Newswires managing editor, will report to Thomson, having recently reported to Thomson in his role as publisher.
, will take on Thomson's role as publisher in addition to his existing duties. Thomson will report to Hinton.
Thomson succeeds Marcus Brauchli who left the paper last month after only 11 months in the job. However, Brauchli will serve as a consultant to News Corp.
News Corp last December.