He had originally planned to be based - with his wife and children - in New York before changing plans.
Grainge’s move marks a significant shift in the group’s power base, with the chief executive’s office now based at the heart of the wider US entertainment business, encompassing TV and film as well as music.
Sources close to Grainge said he would initially move to the Santa Monica office on his own, though they added that “over the course of time it is quite possible that others will join him”. He is currently co-chief executive of Universal, along with chairman Doug Morris, but will assume sole responsibility for the group from 1 January 2011.
The move comes after Grainge wielded his influence recently to strike a deal between Universal and entertainment mogul Simon Fuller, under which the group’s Interscope Geffen A&M division will market and distribute albums from the finalists of Fuller’s American Idol show.
Grainge joins Universal’s president and chief operating officer Zach Horowitz in California. Morris and chief financial officer Nick Henny are still based in New York.
The group’s labels will also remain in their current locations, with Interscope in Los Angeles and Island Def Jam and Universal Motown in New York.
Grainge left the UK earlier in the summer after leaving his position as head of Universal’s international division. He was given a star-studded send-off at a party at the Mandarin Oriental hotel in Knightsbridge, where artists including The Killers, Duffy and Amy Winehouse joined the likes of Lord Mandelson, Lloyds chairman Lord Levene, WPP boss Sir Martin Sorrell and Topshop billionaire Sir Philip Green to pay their respects.