Vermezovic, a former Partizan defender who steered the club to the 2005 national title as coach, will take over next week after the champions play relegated Metalac Gornji Milanovac in Sunday's season finale.
"Our intention was to keep Grant for at least two years because he is an outstanding coach but he decided to part company with us for personal reasons," Partizan president Dragan Djuric told reporters on Friday.
"His presence and coaching skills helped us improve our game and, now that Vermezovic has returned home for a second spell in charge, we hope to reach even greater heights next season."
Grant, who guided Chelsea to the 2008 Champions League final where they lost to Manchester United on penalties, was never fully accepted by Partizan supporters although the club won a record fifth successive league title and their 24th overall under the Israeli.
He took over in January from fans' favourite Aleksandar Stanojevic, when Partizan were 10 points clear of Red Star, and quickly came under fire after a pair of draws let their city rivals back into the title race.
Disgruntled supporters pelted Grant with lighters after his first home game in charge, a 0-0 draw with Sloboda Sevojno, and their relationship went from bad to worse after three successive derby defeats by Red Star, two of them in the cup semi-finals.
The 1-0 league defeat at home to Red Star spoiled Partizan's party after they had already clinched the title with three games to spare, and Grant was jeered as he left the pitch.
Vermezovic, who coached Slovak club Spartak Trnava and South African side Kaiser Chiefs after his first stint with Partizan, faces a tough challenge to qualify for next season's Champions League group stage.
Partizan also named former coach Ljubisa Tumbakovic, who won six league titles and three domestic cups with the club, as the director of operations.
