McIlheney, who founded lads' weekly Zoo, will take on the new position of group editorial director from 18 August.
He will have a wide-ranging role including overseeing digital content, running new projects and integrating the resources of Sport Media Group.
Despite relaunching the Daily and Sunday Sport earlier this year, ABC figures for June show the Daily Sport had lost around 12% of its daily circulation since April.
The group issued a warning to the City last month, noting that its full-year results would be lower than expected.
Sport Media Group acquired Flip Media, publisher of lads' mag Front and DVD World last month.
John Reynolds, Media Week, 22 July 2008, 2:15pm
McIlheney promoted at Sport Media Group
LONDON - Lads' mag guru Barry McIlheney is leaving his role as editor-in-chief of Daily and Sunday Sport owner Sport Media Group. He will be replaced by the former editor of the Cambridge Evening News, Murray Morse.
Barry McIlheney, Sport Media Group
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