Hershey has already said it had no intention of bidding for Cadbury while Nestle has also confirmed that it does not intend to make a bid.
Ferrero said in a statement: "Further to its announcement of 18 November, 2009, Ferrero International SA confirms that it does not intend to make an offer for Cadbury."
Last week Kraft agreed a cash and shares deal which at the time valued Cadbury shares at 840 pence, with Cadbury shareholders also promised a 10p a share dividend.
Hershey and Ferrero had said on 18 November that they were considering bids for Cadbury, and were given until 25 January to come up with a fully financed bid or withdraw.
Shareholders in Cadbury have until 1pm on 2 February to accept the Kraft offer.
The deal has already been recommended by the Cadbury board, with no rival offers on the table.