Vernon, who has served as CEO since the company's spin-off from Mondelez International in October 2012 - will stay on as a senior advisor through March 31, 2015 and as a director until the company's next annual meeting in 2015.
Mackey J. McDonald, lead independent director of Kraft Foods Group, said: "Tony has been a passionate leader, and was instrumental in leading the creation of Kraft Foods Group two years ago as a result of the spin-off from Mondelez International.
"He has championed culture, brand-building and innovation during his tenure, which has led to multiple successful new products and brand rejuvenations, and raised the bar on recruitment and talent development. I want to extend my gratitude to Tony for his leadership and many contributions to Kraft on behalf of the board.
"With the company on solid footing after the spin-off, the time is right for new leadership to fulfill our potential as the industry leader. The board and Tony agree that we need to accelerate the pace of change."
Cahill, who joined Kraft in January 2012 as executive chairman designate, North American Grocery, and became executive chairman when the company was spun-off - previously held senior positions at The Pepsi Bottling Group and PepsiCo.