It was reported to have been working on a joint bid with Italian chocolate group Ferrero - the group behind Ferrero Rocher, which has also confirmed interest.
But Ferrero, which must also abide by Monday's Takeover Panel deadline, is understood to have ruled itself out of the running.
Business Secretary Lord Mandelson, who has voiced opposition to the Kraft takeover so far, said the US firm must be "clear about what it will put into Cadbury so as to build capacity for growth".
"I am encouraged by Kraft's comments this morning about the great respect they have for Cadbury's brands, heritage and people," he said.
"Assuming this deal goes through, I will be seeking an early meeting with Kraft senior management to hear for myself how Kraft will fulfil the commitments they have made to Cadbury and its workforce."
Kraft, whose brand roster includes Dairylea and Toblerone, also faces pressure not to overpay by its biggest shareholder, renowned US billionaire investor Warren Buffett.
The group's chairman and chief executive Irene Rosenfeld said: "This recommended offer represents a compelling opportunity for Cadbury shareholders, providing both immediate value certainty and upside potential in the combined company.
"For Kraft Foods' shareholders it transforms the portfolio, accelerates long-term growth and delivers highly attractive returns, while maintaining financial discipline."
John Flavin, Unite union convenor at the Bournville plant, said: "Obviously we're very, very concerned and very surprised because yesterday the stance was that the board had the view that they wanted to keep the business independent, but obviously overnight there's been some developments that mean that the board appear now to have accepted the improved Kraft offer.
"Our role is to continue our campaign to maintain this as an independent business and also to lobby the shareholders to show them the benefit in staying with Cadbury as opposed to turning the business over to a debt-ridden company with something like £22 billion that will have to be paid down at some point and will probably cost my members their jobs."
Referring to the workers, he added: "They're very concerned and obviously they are contacting me... I am trying to do my best to keep them updated."
Asked about the possibility of strike action, Mr Flavin said: "I think it's a bit early to say that at this point", but vowed to do "everything possible" to save jobs at the plant.
Shadow business secretary Ken Clarke said: "Ultimately, this is a matter for Cadbury's shareholders and not the Government. Cadbury is an important company with a history of providing employment and growth in the West Midlands.
"It is essential that any future management will maintain this tradition and recognise the capabilities and commitment of its workforce."
