Arla is understood to be approaching both roster and non-roster shops for credentials meetings.
The successful agency will take on all the print, TV and outdoor advertising for the brand, promoting its range of cheeses, which include white, blue and black variants.
While Arla has not run any significant campaigns for the brand in the UK recently, it is understood that it is looking to raise Castello's profile among UK consumers.
Its last UK ad push was in 2007, when the brand was backed by a £2.1m marketing budget for its UK launch. As part of that activity, Castello signed up as a sponsor of a six-part ITV1 comedy-drama about estate agents, called 'Sold!'.
To promote the deal, which was overseen by Carat Sponsorship, the brand launched a series of idents using estate agent terminology, such as "under offer" and "slice of commission", in relation to the cheese.
Last year, Arla conducted several pitches for its brands, including one for Lactofree milk, which was secured by Wieden & Kennedy. Abbott Mead Vickers BBDO was also appointed by the dairy giant in July to handle a pan-European campaign to support a range of dairy products under the Arla main brand name.