The move is a major blow for Xfm where O'Connell has hosted the breakfast show for the past six years.
Virgin are going to have to wait for the their new signing until 2006. Xfm said that O'Connell would be staying at the station until the end of the year.
Graham Bryce, Xfm managing director, said: "One of our strengths at Xfm has always been to recognise and encourage new talent. With an impressive DJ roster including names such as Ricky Gervais, Lauren Laverne, Jimmy Carr and Justin Lee Collins, Xfm will continue to develop more award winning talent in the future."
He added: "In the meantime it's business as usual and Christian will continue to host the award-winning Xfm Breakfast Show until the end of the year."
O'Connecll has been a long-time favourite of the radio and media industry where the irreverent humour and mix of indie music has won him fans, along with numerous awards.
This year alone, he picked up three Gold Sonys, including Best Breakfast Show and Best Entertainment Award.
The move will connect O'Connell with a substantially larger audience. London broadcasting Xfm pulls in 258,000 listeners for its breakfast show, in the first quarter of 2005 down 41,000, compared with Virgin Radio's 1.2m nationally.
O'Connell said, that for him, the move was "a dream come true".
"I can't wait to reach out to the country and beckon them to join me each morning with the combination of my show and the music we all love. Virgin Radio is a huge station, with a huge reputation. It's the station I have always wanted to be on, I am an avid listener and fan. It's a dream come true and I can not wait."
Paul Jackson, the acting chief executive at Virgin Radio, said that the signing was the significant for Virgin and would cause rivals sleepless nights.
"Christian O'Connell is the leading radio talent of his generation and this signing positions the station at the top of the radio game in London and across the country. This is a very exciting time for Virgin Radio," he said.
The breakfast market is fiercely competitive in London and has already led Capital and Heart to sign TV presenters Johnny Vaughan and Jamie Theakston, backing them with high-profile advertising.
Pete and Geoff's 6am to 10am show is in fifth spot in terms of reach among London's commercial stations, with 597,000 listeners in an average week during January to March. This had increased by 90,000 over the last quarter.
The show is currently only 38,000 listeners behind Kiss 100 FM's 6am to 9am 'Bam Bam Breakfast Show'.
However, Virgin Radio also has a national listener base on AM and digital, giving its breakfast show a total audience of 1.2m.
Pete and Geoff are likely to stay with Virgin Radio and may return to the drivetime slot, which they filled before moving to the breakfast show.
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