The change is believed to have been instigated by the new Nestle Rowntree marketing director, David Rennie, who joined in August.
The decision to move Nestle from a brand-led strategy was taken by Chris White, the Nestle UK managing director, who appointed O'Reilly in February 2004. He also created a consumer communications department to act as a bridge between brands and agencies. It is understood the department will be dissolved.
A Nestle spokesperson said: "Two years ago, we separated consumer communications from the brand teams to focus on realigning our agencies. Consumer communications can now be integrated back into the brand marketing structure. Mike is exploring other opportunities within Nestle."