NEW YORK (Reuters) - AOL Time Warner Inc. has hired Jon Miller, a top executive from USA Interactive, to lead the company's struggling AOL Internet division, sources familiar with the situation said on Tuesday.

The company is expected to make a formal announcement later on Tuesday.

Miller, who recently left media mogul Barry Diller's Internet media company USA Interactive , will replace Robert Pittman as the former boss of its Internet group. Pittman, who was also the parent company's chief operating officer, resigned under pressure in July only months after he was sent to help lead AOL's recovery.

A source familiar with the situation said Miller will start immediately.

AOL, the world's No. 1 Internet services provider, had cast a wide net for a new chief. In April, Pittman had replaced former AOL head Barry Schuler.

Miller's appointment marks one of the first appointments of someone from outside AOL to a senior position at the online division, but the move is aimed at shaking up the once tight-knit unit, which has seen a wave of departures by top executives.

He steps into a difficult role -- one in which he will have to contend with government inquiries into AOL's accounting practices, as well as finding a way to migrate many of AOL's 35 million subscribers to high-speed access while contending with a lingering slump in advertising spending.

The U.S. Securities and Exchange Commission ( news - web sites) and Justice Department ( news - web sites) have launched inquiries into the online division's accounting. The company has stood by the accounting at AOL and said its auditors have confirmed its practices were in accordance with generally accepted accounting principles.

The inquiry comes after the Washington Post last month raised questions about the online division's accounting of some deals completed in 2000 and 2001.

At USA Interactive, Miller was one of Diller's top executives as head of the company's information and services group. Prior to USA, he had held posts at Viacom Inc. , the National Basketball Association, and PBS. With experience in television and interactive commerce, Miller is expected to push add-on services at AOL such as exclusive content to boost revenue per subscriber.

A source close to Miller also said he may use his experience at USA to make the management structure more transparent, simplifying AOL's currently complex top ranks.