The agency has been tasked with strategic planning and creative, building the brand and the in-store experience.
According to reports, Y&R pitched against Interpublic Group's Foote Cone & Belding and Omnicom Group's DDB Chicago, as well as Leo Burnett, to win the account.
Warren Kornblum, chief marketing officer at Toys 'R' Us, said: "While we're excited to be focusing on the future, we'd also like to acknowledge the strong partnership we've had with Leo Burnett for the past five years and express our respect for all of its efforts on our behalf."
Media for the account has not been affected by the review and will remained with Publicis Groupe's Starcom. The new creative campaign is due to break in the fourth quarter of the year, in time for the crucial Christmas sales period.
Toys 'R' Us has 681 stores in the US and 579 stores internationally.
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