In a statement late Tuesday, Times Chairman Arthur Sulzberger Jr. called Thompson a "gifted executive" and hailed his ability to generate revenue from new types of products. In particular, the Times Co. cited the BBC's multimedia offerings during the London Olympics.
Thompson replaces Janet Robinson, who resigned as CEO in December. Thompson will move from the U.K. to New York and begin in November. He'll also join the board of directors.
Stock in the Times Co. increased a penny to $9.10 in after-hours trading following the announcement.
Sulzberger said Thompson, 55, was the ideal candidate to lead the company "when we are highly focused on growing our business through digital and global expansion."
The Times Co., faced with declining ad revenue from its printed editions, has been trying to boost revenue from digital products. Last year, it began charging for online access to The New York Times, the International Herald Tribune and The Boston Globe newspapers.
In the quarter that ended in June, the company had 532,000 digital subscribers at those newspapers. Digital subscriptions helped the company increase overall revenue by nearly 1 percent in the quarter to $515 million.
At the same time, the company is shedding troubled businesses, even if they are online. Last week, it agreed to sell its About.com information service for $270 million following several quarters of slowing revenue.
The appointment follows the company's addition in June of two technology heavyweights to its board: Joichi Ito, an early investor in Twitter and director of the Media Lab at MIT, and Brian McAndrews, a venture capitalist who specializes in funding technology startups.
Thompson led the British Broadcasting Corp. as director-general for eight years. He presided over a difficult period marked by job reductions, cuts in operations including websites for some shows and unpopular changes to employee pension programs. Last year, the BBC announced a plan to cut 2,000 jobs with a goal to cut costs by 20 percent.
In addition to his role as director-general, Thompson became chairman of BBC Worldwide this year. That's the unit that sells DVDs and other merchandise and licenses BBC shows outside Britain. It had revenue of about $1.7 billion in the year through March, or about a fifth of the total.
Thompson said in March that he would leave the BBC following the London Olympics, which wrapped up Sunday.
Thompson said in a statement he was excited to join the Times Co. "as it extends its influence digitally and globally."
Douglas Arthur, an analyst with Evercore Partners, said the hiring was a "positive development" and should help the Times Co. expand internationally. The New York Times launched a Chinese-language website in June.
Thompson also is used to the challenge of being the head of a prominent global brand, Arthur said.
"He's used to the intense glare of the media circus in the U.K. He's no rookie," Arthur said. "The challenge is he comes from a TV background, not a print one."