Virgin began a review of the account, which includes above-the-line advertising and direct marketing, back in October.
Integrated agency Kitcatt Nohr, which re-pitched for the business, held the account since early 2004.
The review follows a restructure of the marketing department earlier this year, after the arrival of marketing director Andrew Shelton in 2006.
Shelton said: "Kitcatt Nohr Alexander Shaw has been instrumental in the success of our company over the last few years, and I certainly thank them for their support and role in this. They have worked with us to deliver some fantastic campaigns.
"Our decision is not a reflection on the skill and dedication the agency has given us, but is primarily driven by a change in our business needs as we move forward."
Shelton will oversee the transition process during the first three months of 2008.