The telecoms group said the professional services firm will replace previous auditor PwC, closing the chapter on a 30-year relationship with the accountancy giant.
PwC will complete its audit of BT’s accounts for the 2017/18 financial year, after which KPMG will be appointed as auditor, subject to approval by shareholders at the 2018 annual general meeting.
The move comes after an accounting scandal at the firm’s Italian division, BT Italia, which resulted in the firm booking a £530 million writedown.
Shares plummeted 19 per cent when BT first revealed details of the irregularities in January, wiping £8 billion off its stock market value.
BT boss Gavin Patterson was also stripped of his bonus following the scandal, with his total pay packet cut from £5.3m to £1.3m.
“BT, KPMG and PwC will commence transition planning immediately to ensure a smooth and effective migration during 2017/18”, the company said.