The chocolate bar will be launched next month, marketed under the popular Dairy Milk brand. Mike Tipping, head of customer relations at Cadbury Trebor Bassett, said Dairy Milk Wafer would sell for 39p, just under the 40p price of a KitKat.
Tipping said: "We are launching Daily Milk Wafer off the back of our Dairy Milk brand as an opportunity to target consumers in the early morning, when they are more likely to buy this type of product."
"We will also be targeting it at young males, who tend to eat more chocolate than women," he added.
KitKat sales dropped by 9% last year to £95.2m, although that still works out at one KitKat being eaten every 47 seconds in the UK.
Earlier this year, Nestle revealed it was considering the introduction of unusual flavours including savoury varieties like Tikka Masala in an effort to boost flagging sales.
KitKat's attempt to retain its crown as nation's favourite chocolate bar has seen the launch of orange and mint varities, Kit Kat Chunky, Kit Kat cubes and Kit Kat ice-cream in recent years.
Cadbury has its sights set on becoming the nation's favourite chocolate bar, a position which Nestle Rowntree's KitKat has been hanging on to for years.
However, trend reports show that UK chocolate consumption is falling, with the introduction of more snack bars coupled with the nation's concerns about diabetes and obesity.
Jeremy Cunnington, an analyst for Euromonitor, said: "The UK market is very saturated and there is not a lot of room for more products to come in. What is happening is that snack bars that have come in have seen strong growth and taken away sales from the chocolate industry."
The UK still tops the international league for chocolate consumption with the average Britain eating over eight kilogrammes per year, three more than our European counterparts.
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