The move is a bitter blow for ITV's recently-named director of television Simon Shaps - just two months ago, the show topped the 3 million viewers mark in the ratings. The show habitually trounced Channel 4's Richard and Judy, and periodically nipped at Weakest Link's heels over on BBC Two.
Under the terms of the deal, O'Grady will share the 5pm timeslot with Richard and Judy; each show will air for half the year.
"It's lovely to share the line-up with Richard and Judy and make Channel 4 the only place to be at teatime," said O'Grady. "My time at ITV with The Paul O'Grady Show surpassed all my expectations and I'm indebted to everybody who worked on it and watched it; but I work best when I'm set a new challenge and am forced to fly by the seat of my pants."
In addition, O'Grady will still be free to appear on other networks during primetime, allowing his new talent show for ITV to go ahead.