Reposted from Kara Swisher’s post at All Things D:

BoomTown has confirmed a report by Nikki Finke of Deadline Hollywood Daily that former AOL head Jon Miller is set to take over as digital head at News Corp., replacing Peter Levinsohn.

The move was also mentioned in a blog post by Miller’s partner in an investment company, Ross Levinsohn, who once held a smaller version of the job Miller is taking.

But Miller has not actually signed up for the job officially, since he is still under a non-compete agreement with Time Warner from his AOL stint. It runs out in three days, in fact.

As some might recall, Miller was barred from taking a board seat at Yahoo last year by Time Warner CEO Jeff Bewkes.

But sources said News Corp. is likely to announce Miller as head by Monday or Tuesday at the latest.

Once he does sign, which seems likely, Miller will become News Corp.’s chief digital officer, reporting directly to the media giant’s head, Rupert Murdoch. Based in New York, he will also be chairman and CEO of the newly created News Digital Media group.

Sources noted that this is a a different and larger platform for Miller, bigger than just the Fox Interactive Media job that Levinsohn held. It will go across all properties held by News Corp. across the globe.

“The idea is to mainstream the digital initiatives, which have been all over the company,” said one source close to the situation.

Levinsohn will move to another job within News Corp. (NWS) at the film and television studios, to coordinate the delivery its assets on mobile and digital platforms, sources said. It will be his task to create sustainable business models in this fast-moving arena.

News Corp. has, in fact, been searching for a new digital head for the past several months, talking to a number of well-known Internet execs, including Joost head Mike Volpi, former AOL exec Jim Bankoff and former Facebook exec Owen Van Natta.

The decision to rejigger News Corp.’s digital assets came after the announcement that President and COO Peter Chernin was leaving his job and has largely been pushed by Murdoch.

Previously, Chernin had been in charge of digital efforts at News Corp.

The search for the position was, in fact, conducted by well-known head tech and media headhunter Jim Citrin of Spencer Stuart.

Ironically, Miller is still essentially taking a job once held by his current partner, Ross Levinsohn, at the investment fund, Velocity Interactive Group. As I noted above, Levinsohn confirmed the Miller’s offer from News Corp. in a blog post called “Thunderclap.”

The move is a fascinating one, and one of many in the digital arena of late among its top execs. Former Google (GOOG) exec Tim Armstrong recently took over as CEO of the Time Warner (TWX) online unit AOL, for example.

Also, even though the job will cover all the the many News Corp. Web properties, even more compelling will be how Miller will deal with its largest and most prominent asset: social networking giant MySpace.

More to the point, it will be riveting to see how he will handle managing its MySpace Co-Founder and CEO Chris DeWolfe.

Both previous FIM heads, Ross Levinsohn and Peter Levinsohn, many sources said, had to deal with DeWolfe’s own sphere of influence within News Corp., especially his close ties to Murdoch. Both FIM and MySpace are located in Beverly Hills, Calif.

Relations between DeWolfe and both those execs could be described, at best, as tense.

But Miller, who is a much bigger Internet player in his own right, with a more powerful charge from Murdoch, certainly is likely to shift that balance of power.

More to come…