Blenheim's Kennard aggravated an existing hip condition at last month's Rally Argentina and doctors have advised him to stand down for the sixth round of the FIA World Rally Championship.
Briton Seb Marshall will replace Kennard and will become Paddon's permanent partner when Kennard retires following July's Rally Finland.
Paddon and Marshall competed together for the first time at Rallye Sanremo in Italy last month. They finished second in a Hyundai i20 R5 as a warm-up for the following weekend's WRC tarmac round in Corsica.
Despite sitting out the rally, Kennard will be in Portugal to support Paddon and team-mates Thierry Neuville and Dani Sordo.
Paddon is eighth in the WRC points after a sixth place finish in Argentina.