The deal, secured by Cereal Partners' promotional agency, Exposure, will see SwapitShop create a co-branded trading zone on the site.
The area, called the Nestle Cereals Cosmic Kahuna Auction Frenzy, will feature the Disney characters alongside Nestle breakfast brands Shreddies, Frosted and Coco Shreddies, Nesquik and Golden Nuggets.
A range of Lilo & Stitch goodies will be up for grabs.
To create excitement around the online promotion, the zone will only be available until the end of the month.
The section will be promoted on branded packages sent to SwapitShop users containing goods bought with Swapits, the site's online currency. A prize draw of 1,000 free Swapits will be used to get users to pass on promotion details.
"Kids are regularly checking their bids, so they are constantly immersed in the promotion, making it more interactive," said Jonathan Attwood, chief executive at WebSwappers, SwapitShop's parent company.
As part of the Disney promotion, packs of Nestle Golden Nuggets have been turned 'chocolatey' by Stitch.
Promotional packs of the range of Nestle cereals will also carry stickers featuring characters from the movie and the chance to win a trip to Hawaii.
Cereal Partners has previously tied up with SwapitShop for paid-for promotions including a campaign based around Hollywood blockbuster movie Spider-Man in May.