The agency was awarded the Adams Foods-owned dairy brand's £3 million business after a pitch against Creature London and the previous incumbent, WCRS.
Karmarama, which already handles the advertising for its sister brand Pilgrims Choice, will develop a relaunch campaign for Kerrygold.
WCRS had held the business since 2006, after winning the account in a pitch against Leo Burnett and Farm.
The latest pitch, which kicked off in September last year, was led by Alastair Jackson, the marketing director at Adams Foods. He said: "Karmarama demonstrated that they really understand the modern British consumer, creating something unique for Kerrygold in what is a very crowded marketplace."
Sid McGrath, Karmarama's chief strategy officer, said: "We're thrilled to be working with such great clients."