Hamilton heading to Mercedes
Lewis Hamilton will end his 14-year association with McLaren at the end of the season and join Mercedes on a three-year contract.
The decision to leave McLaren after a 14-year association with the team has been described by one source close to Hamilton as "the toughest of his career".
The 27-year-old replaces Michael Schumacher at Mercedes, with the 43-year-old seven-times champion now likely to retire from Formula One for a second time.
Hamilton said: "It is now time for me to take on a fresh challenge and I am very excited to begin a new chapter racing for the Mercedes Formula One Team.
"Mercedes-Benz has such an incredible heritage in motorsport, along with a passion for winning, which I share.
"Together, we can grow and rise to this new challenge. I believe that I can help steer the Silver Arrows to the top and achieve our joint ambitions of winning the world championships."
McLaren announced earlier on Friday morning that Sergio Perez would be their replacement for Hamilton, the 22-year-old Mexican signing a multi-year contract with the Woking-based marque.
But it is Hamilton's switch which will send shockwaves through F1 as he now teams up with close friend Nico Rosberg at Mercedes.
Mercedes team principal Ross Brawn said: "I am delighted to welcome Lewis Hamilton to our team.
"The arrival of a driver of Lewis' calibre is a testament to the standing of Mercedes-Benz in Formula One and I am proud Lewis shares our vision and ambition for the success of the Silver Arrows.
"I believe the combination of Lewis and Nico will be the most dynamic and exciting pairing on the grid next year, and I am looking forward to what we can achieve together.
"Over the past three years we have been putting in place the foundations and building blocks that are needed to compete regularly for the world championship.
"Behind the scenes, we have assembled a team that is technically stronger, more experienced and better resourced, thanks to the support of Petronas and all of our loyal team partners.
"The potential is now there to match any other team on the grid, which is the minimum standard for a Mercedes-Benz works team.
"Our task is now to translate that potential into on-track performance for next season and beyond."
Hamilton has spent the last few weeks agonising over the decision, having signed for McLaren aged 13.
Mercedes entered into talks with McLaren's management company, XIX Entertainment, several weeks ago.
Their offer was significant, not only in terms of money, but it also allowed Hamilton greater freedom with regard to his image rights and less impact on his personal time from sponsorship appearances.
Mercedes have only won one of 52 races since Mercedes took over Brawn GP at the end of the 2009 season, but the core of people behind the scenes is second to none.
Importantly, with new engine regulations due to come into force in 2014 as F1 switches to a new turbo era, Mercedes should have an advantage as a manufacturer and with McLaren as a customer.
Norbert Haug, vice president of Mercedes-Benz Motorsport, said: "Mercedes-Benz has supported Lewis throughout his career, from karting, to Formula 3, to our successful partnership with McLaren, and it will be a very nice moment for all of us in the team to see him at the wheel of a works Silver Arrow next season, following in the tradition of British Mercedes-Benz Grand Prix drivers Sir Stirling Moss and Richard Seaman.
"Of course, it takes a great driver to replace such a legendary and successful one as Michael Schumacher.
"Over the past three years, Michael has been a great driver and an exemplary ambassador for Mercedes.
"His experience has been an important factor in guiding the development of our team in Brackley and we extend our sincere thanks to Michael for his loyalty, team play and commitment.
"We will be working very hard together in order to achieve the best possible results in the remainder of the 2012 season.
"The central task of any racing team is to deliver a car that allows the drivers to fully express their talents.
"In the 52 races for our works team, we have achieved a number of important milestones, including an historic victory for Nico Rosberg in China this year.
"We know it is now time to take the next step, in order to deliver consistent front-running performances in the tradition of the Silver Arrows.
"Every single person in our team is working with total commitment and focus on achieving this ambition."
As for Schumacher, his future is unclear, but he said: "I have had three nice years with the team which unfortunately did not go as well as we all would have wanted on the sporting side.
"I wish Lewis well and for the team to achieve the success we worked so hard for in the build-up.
"I would like to thank the team for their trust and all the guys for their unconditional commitment. I will now concentrate on the next races."