The mayor selected Cathie Black to follow Klein because of her unique experience building on successes and leading teams to even greater achievements, including her stewardship of Hearst Magazines for the last decade and a half.
"There is no one who knows more about the skills our children will need to succeed in the 21st century economy," Bloomberg said.
The billionaire former CEO often eschews traditional resumes for government posts, instead cultivating his business relationships for his hiring pool.
Black, a Chicago native, is also widely credited with building USA Today into an unprecedented success in her eight years there, and broke through an important gender barrier in 1979 when she became the first publisher of a weekly consumer magazine, New York. New York City has never had a female Schools Chancellor.
"Our schools are vastly better than they were just eight years ago when the Mayor took office and Chancellor Klein joined his Administration," said Ms. Black. "Their passion for improving the educational opportunities of our students has lifted the bar higher than anyone could ever have imagined, and my main goal will be to build on the work that has been accomplished during the Bloomberg Administration, and Chancellor Klein's tenure. I want to thank the Mayor for the privilege of joining his Administration and the great team of people who carry out the City's mission each and every day."
Joel Klein is among Bloomberg's longest-serving commissioners. He has overseen the city's 1.1 million-pupil school system since 2002. Klein is joining News Corp., where he will be the Executive Vice President.
"I want to thank Mayor Bloomberg for giving me the best job of my life and for being there every step of the way in the effort to improve education for our students," said Chancellor Klein. "Public schools in New York City changed my own life and it has been a rare privilege to serve the kids and families of this city during the past eight years. I am thrilled that the Mayor has selected Cathie Black, a distinguished leader, to move this work forward."
When Bloomberg entered City Hall, the city's schools were not under mayoral control. The mayor fought for and won that right from the state Legislature, and had the power renewed last year.
Under Klein's tenure, the city school system ended the decades-old controversial practice of "rubber rooms" for misbehaving teachers and stopped the practice of automatically sending failing students onto the next grade. The city also began grading schools.
Before Klein joined the Bloomberg administration, he was with the media conglomerate Bertelsmann AG. Previously, he was an assistant attorney general in the Clinton administration. He headed the U.S. Justice Department's antitrust division for nearly four years, where his work included launching the case to break up Microsoft Corp.
Black comes to the job without experience as an educator, which was among the chief complaints of Klein's critics.
She said she had had "limited exposure to unions" in her previous jobs. Her children attended private boarding school in Connecticut.
"I promise you that we will continue the mission of improving the school experience for our children so that they too will be prepared to participate fully in our global community," Black said.
She also wrote the book "Basic Black: The Essential Guide for Getting Ahead at Work (and in Life)."
For more on this breaking story, tune in to Eyewitness News at 5 p.m.
(The Associated Press contributed to this report)
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