Petronas, the Malaysian-owned oil and gas company, has been announced as the title sponsor of the new Mercedes GP team. The outfit will be known as Mercedes GP Petronas Formula One Team. The length of contract was not announced – the team describing it as "long-term" – but is expected to run for three years. Full details of branding will only be revealed when the new Mercedes car makes its track debut on February 1st.

In addition to the Formula One deal, the agreement "paves the way for future collaborations between the two companies". In a statement, the team added: "For Petronas the partnership will enable the oil and gas giant to generate sustainable business growth, particularly in the downstream lubricants market."

Norbert Haug, vice-president of Mercedes-Benz Motorsports, said the company was very pleased to secure a title sponsor for the team. "Petronas' home base in Kuala Lumpur is located in the middle of a fast-growing region for the automotive industry," he said, "which makes this new partnership even more valuable."

Team principal Ross Brawn added: "The collaboration of the premium automotive brand Mercedes-Benz and a company as prestigious as Petronas gives our team a fantastic base from which to achieve our ambition of competing at the top level of Formula One."

News of the deal comes as a surprise. Just days ago, Petronas, a long-time Formula One sponsor, had indicated it would no longer be a team sponsor and instead concentrate on its title sponsorship of the Malaysian Grand Prix. It has previously sponsored the BMW-Sauber team and was briefly linked to a deal with the new Malaysian-backed Lotus F1 Team. However the lure of being associated with a works Mercedes team – almost certainly with returning seven-time world champion Michael Schumacher driving – is thought to have proved too much.

In November Mercedes bought a majority share in the double 2009 championship-winning Brawn GP team. Brawn himself is staying on as team principal, with Nico Rosberg already confirmed as the first of the team's drivers. Schumacher is believed to have agreed a deal worth around US$7 million for a sensational return to the sport after a three-year absence. However confirmation of his return depends on him passing medical tests on his neck, which he injured early in 2009 and ruled him out of replacing the injured Felipe Massa at Ferrari in August.