Jimmy Kimmel’s star at ABC continues to rise. After a decade of slow build in awareness and ratings and on the heels of landing its first best series Emmy nomination, Jimmy Kimmel Live will move to the prime 11:35 slot in January, facing veterans The Tonight Show With Jay Leno and The Late Show With David Letterman. The shift, which has been years in the making, will have venerable newsmagazine Nightline move to 12:35 AM. Kimmel will enjoy his new late-night perch for at least two years as he has signed a new two-year extension to his contact with ABC.

Jimmy Kimmel Live originally started at 12:05 AM. In January 2011, its start time shifted to 12 AM, with Nightline‘s length shortened to 25 minutes. JKL will take over the 11:35 PM slot on January 8. Additionally, ABC will add a permanent primetime edition of Nightline in the Friday 9 PM slot, beginning March 1. (When it shortened Nightline last year, ABC committed to 13 primetime editions.) The slot had been occupied primarily by ABC News with its successful What Would You Do? franchise.

ABC’s decision to pull the trigger on the long-rumored switcheroo stems from JKL‘s ratings momentum — Jimmy Kimmel Live was the only late-night broadcast talk show to increase its viewership this past season, its most-watched in 5 years. It also has a younger audience than its broadcast competitors Leno and Letterman as well as the show it will replace, Nightline, making it appealing to broadcast advertisers. “Given the passionate fan base Jimmy Kimmel Live has built over the past decade, and the show’s ratings and creative momentum this season, the time is right to make this move,” Disney/ABC TV Group president Anne Sweeney said. “There is the potential for far greater upside over the long term with this shift, given increased advertiser demand for competitive entertainment programming in the timeslot.”

There had long been speculation that ABC wanted to put an entertainment program at 11:35 PM in pursuit of larger revenues. While Nightline makes money (it regularly wins its time period), it is nowhere near what a talk show brings in. Word is that The Tonight Show makes about $90 million in the time slot, Late Show about $85 million. Those are major contributions to the networks’ bottom line, and ABC has eyed sharing the pie. The network brass reportedly offered the slot to David Letterman when they went after the late-night host more than a decade ago. But the storied history and ratings strength of Nightline seemed to always get in the way, with potential backlash from moving the veteran newsmagazine helping the news division protect its time period until now. Observers point out that the 12:35 AM slot is older-skewing, with adults 25-54 HUT levels higher than 18-49, making a news program better suited for the period.

As for the timing of the scheduling reshuffle, making it next month, right after Kimmel’s high-profile Primetime Emmy hosting duty seems logical, but I hear ABC opted to do it outside of the fall launch blitz in order to give it more promotional muscle and a better chance of standing out in the clutter. ABC will use Dick Clark’s New Year’s Rockin’ Eve with Ryan Seacrest and ESPN’s Bowl Championship Series, which culminates with the National Championship Game on Monday, January 7, to trump up its late-night relaunch. Meanwhile, Nightline will stay in its more prominent time slot throughout the conclusion of the presidential campaign. In addition to news value, that is expected to bring extra political ad revenue to the network and its O&O and affiliated stations as it allows for an uninterrupted playing field for political coverage on local and national level from 11 PM-12 AM.

During the recent July sweep, ABC’s Jimmy Kimmel Live jumped year to year by 14% in Total Viewers to deliver its most-watched July sweep ever. Kimmel’s profile also has risen significantly over the past decade through his various hosting gigs, like the AMAs, ESPYs and now the Emmys, and his now traditional JKL stints during the NBA finals and after the Oscars.