James Murdoch, left, signed the agreement in Beijing
Murdoch has cultivated relations with China for years in the hope that Star TV, his Chinese network, would reach more of the country's 1.3 billion-strong population.
The new deal means a 24-hour Mandarin-language entertainment channel will be broadcast on cable to Guangdong, China's most affluent province.
Star, run by Rupert Murdoch's son James, has previously only been allowed to broadcast to expatriates and tourist hotels, which received the service by satellite.
Two other foreign-owned channels - Phoenix Chinese Channel, in which Murdoch's News Corp owns a major stake, and AOL Time Warner's CETV - have also recently been given access to Guangdong.
The province is seen by some as a testing ground for the foreign channels.
China has 74,000 broadband internet subscribers - but 95 million people take cable TV.
Media groups hope cable deals will encourage the spread of broadband internet.
"We won't do programs that are offensive in China," said Wang Yukui, a Beijing-based spokesman for News Corp.
That stance is in keeping with Star TV's regional policy of not broadcasting programs that are unacceptable to local audiences, he said.
"If you call this self-censorship, then of course we're doing a kind of self-censorship."
The company is looking forward "to having a broader reach to Chinese audiences" in the long term, he said.
The channel will probably show game shows, dramas, comedies and talk shows, according to James Murdoch.
"Game shows work, I like game shows," he said.
The Indian version of Who Wants To Be A Millionaire? has already made Star the most popular satellite broadcaster in that country.
In return for being allowed cable access, News Corp has agreed that its United States network, Fox, will carry the English-language channel of Chinese state broadcaster, CCTV-9.
The Murdoch empire has previously courted the Chinese government - sometimes attracting international criticism in the process.
But while this deal is being seen as a relaxation of the Chinese government's firm grip on the media, some say it will have the opposite effect.
Millions of Chinese households have received semi-legal foreign satellite channels for years - but this could be a way for authorities to take more control of what is watched, analysts say.
"In the past, there was no enforcement, and it was a wild west area. Now they are creating a legal area, which makes all the rest illegal," according to Norman Waite, a media analyst with Salomon Smith Barney in Hong Kong.