Michael Schumacher targeted an unprecedented eighth Formula One title yesterday after Mercedes announced he was coming out of retirement to race for them at the age of 41.

"I have won it seven times and I'm with the team that won both titles last season, so what do you expect?" he told the BBC.

"You can't expect anything else other than to go for the world championship and that's what we are aiming for."

Media reports have suggested the German, who won his titles with Benetton and Ferrari and retired at the end of 2006, will earn seven million euros in what would be an all-German line-up.

"We are talking about a three-year deal, it's not just a one-off thing," said the former Ferrari ace of a contract that had been expected to last just one year.

"We are looking for continuation."

Mercedes, who have taken over champions Brawn GP, have signed Nico Rosberg as their other driver for 2010. World champion Jenson Button has left the British-based team for McLaren.

A move to Mercedes will give Schumacher, who turns 41 in January, a potentially winning car and re-unite him with Ross Brawn, the technical director who guided him to all his titles and who is now the team principal.

"It was the only combination that would have triggered it (my return) there was no other combination that I would have liked to have worked for and with," Schumacher said.

"Ross is a long-term friend and he knows me in detail. We've won races together we shouldn't have won, we've had tough times, good times but we managed to finish on a positive attitude. I feel very inspired and really great to deliver something."

In a statement released by Mercedes, Brawn said all the building blocks were in place for another successful season.

"With the completion of our driver line-up, I believe that we now have the most exciting partnership in Formula One with Michael and Nico, who provide the perfect mix of talent, experience, speed and youth," he said.

Yesterday's announcement will take Schumacher's career full circle, since the German drove for the Mercedes sportscar team before breaking into F1 with Jordan in 1991.

Schumacher had planned a comeback with Ferrari earlier this year as a stand-in for injured Felipe Massa but had to abandon that idea due to a neck injury.

Since his retirement the German has worked as a consultant for Ferrari, but the Italian team has said that is not a binding agreement.

Schumacher will be returning to a very different, and more cost-conscious, Formula One from the series he left after a record 91 wins from 249 starts.

Mercedes and Ferrari will be the only fully manufacturer-owned team, with BMW, Honda and Toyota having all left in the past year and Renault due to sell a significant stake in their British-based operation.

Schumacher will be hoping to emulate the likes of Niki Lauda and Alain Prost, champions who both came back to win titles after time out of Formula One.

Former champions Damon Hill, Schumacher's leading rival in the mid-1990s, and Nigel Mansell have both said that age will be no impediment and that the German could return as a winner.

"It wouldn't surprise me if Michael challenged for another world championship," Britain's 1992 champion Mansell, who won his title aged 39 and competed in Formula One until the age of 41, said.

Schumacher's return will allow 2008 champion Lewis Hamilton, who entered the sport only after Schumacher retired, to measure himself against Formula One's most successful driver while also setting up an intriguing Anglo-German battle.

Hamilton and 2009 champion Button will form an all-English pairing at rivals McLaren, who will still be powered by Mercedes engines.

The sport's oldest champion remains the late Argentine Juan Manuel Fangio, who took his fifth title at the age of 46.

The oldest driver to win a grand prix is Italian Luigi Fagioli in 1951 at the age of 53.