Stoffel Vandoorne will replace Jenson Button at McLaren next year, as the British driver takes a sabbatical from racing.
Button, who made his F1 debut in 2000, will take on a new role at McLaren, the British driver announced after qualifying for the Italian Grand Prix.
McLaren said 2009 world champion Button will stay on at the team in an "innovative new two-year role, focusing on team and car development."
The Briton will not compete with the team next year, but McLaren said it will have an option to get Button back into the race seat in 2018.
Button insisted he was not retiring from racing, however.
"To be clear, I'm very definitely not retiring. I'm contracted for both 2017 and 2018, I intend to work hard on car-development, and I'm sure I'll get behind the wheel of the new car at some point," he said.
Vandoorne, last year's GP2 champion, will race alongside Fernando Alonso in 2017.
"I'm delighted that I'll be staying on as a key member of the McLaren-Honda team," Button added. "In fact I'm massively excited about my new role, which has come about as a result of a number of in-depth chats with Ron [Dennis].
"Specifically, I'm looking forward to becoming even more deeply involved in the team's efforts to bring about the success we've all been striving to deliver.
"I love McLaren-Honda – I firmly believe it's made up of the best bunch of people I've ever worked with – and I have no intention of ever driving for another Formula 1 team."
McLaren boss Dennis added: "On behalf of all at McLaren-Honda, I want to say how thrilled we are that Jenson has extended his contractual relationship with us. Moreover, I'm absolutely certain that the depth of his experience and the currency of his expertise will give us an advantage over our opposition next season."
Button, who made his grand prix debut with Williams back in 2000, has been racing for McLaren since the 2010 season, a year after having taking his title with the Brawn squad.
The Briton, 36, has 14 wins and 50 podiums to his name.
He has raced for Williams, Renault, Benetton, BAR, Honda, Brawn andMcLaren in a career that includes 297 grand prix starts, making him the third most experienced driver in F1 history, only behind Rubens Barrichello and Michael Schumacher.
Vandoorne, who made his grand prix debut earlier this year when he replaced the injured Alonso in Bahrain, admitted signing the contract to race with the team was an emotional moment.
"First of all, I want to express my gratitude to everyone at McLaren-Honda, and especially Ron, for showing faith in me," he said.
"I've signed loads of autographs in my career, but, when I inked my signature on my McLaren-Honda contract today, it's safe to say I had an exceptionally special feeling as I picked up my pen to do so.
"It's an enormous honour to become a McLaren-Honda race driver, and I promise to work as hard as any Formula 1 driver ever has before."