Formula One champions Brawn will compete as Mercedes Grand Prix next season after the German carmaker announced a takeover yesterday along with the sale of their stake in McLaren.
Daimler chairman Dieter Zetsche, whose company owns Mercedes, said Ross Brawn would remain team principal while the carmaker will continue to supply long-term partners McLaren with engines until 2015.
"In the changed environment of Formula One, we will face the competition on the most important motor sports stage from now on with our own Silver Arrows works team," he said.
Mercedes had been 40 per cent shareholders in McLaren but that team, who won the 2008 drivers' title with Lewis Hamilton, said in a separate statement that they had agreed to buy back the stake by 2011.
Brawn GP, who emerged from the remains of departed Honda, won the championship in their debut season at the Brazilian Grand Prix last month with Britain's Jenson Button also securing the drivers' title.
Mercedes would not comment on who would be driving for Brawn, although Germany's Nico Rosberg looks certain to be in the line-up after leaving Williams.
Button is out of contract and has also been talking to McLaren as well as Brawn.
The takeover deal, which had been expected, gives Mercedes a majority shareholding in Brawn along with Abu Dhabi investment company Aabar, who bought a 9.1 per cent stake in Daimler last March.
The two combined will own 75.1 per cent of Brawn, with Daimler holding 45.1 per cent. No financial details were given.
"Brawn GP has been through an incredible journey over the last 12 months," Ross Brawn said in a statement.
"From fighting for our survival to forging a strong relationship with Mercedes-Benz High Performance Engines, winning both the Constructors' and Drivers' World Championships, and now accepting Aabar and Daimler's offer to buy our team which will secure its future."
Mercedes and McLaren have been partners since 1995 but the relationship has been strained by McLaren's determination to emulate rivals Ferrari as a road car manufacturer as well as a racing team.
The strains were further tested when McLaren were fined a record $100 million for a 2007 spying controversy.
"Our relationship with McLaren was affected in recent years by the fact that the other shareholders were very much interested in building up the new automotive company, including sportscars and super-sportscars," said Zetsche.
"That was not the interests of Daimler and Mercedes-Benz."
Mercedes last ran their own Formula One team in 1955, when Argentine Juan Manuel Fangio drove for them and won the third of his five titles.
The carmaker pulled out of the sport that year after one of their cars crashed at the Le Mans 24 Hours sportscar race, killing at least 82 spectators in motor racing's biggest disaster.
The company returned to motor racing in 1988 and Formula One in 1993 as engine partners to the Swiss Sauber team.
Zetsche said there would be an immediate re-branding of the Brawn cars. The company issued separately a photograph of a silver-liveried car with the Mercedes star on the front.
Mercedes motorsport vice-president Norbert Haug rejected a suggestion that they would opt for an all-German line-up, saying the team would be an international operation with the best available drivers.