The former Honda Formula One team has been saved and will race this season as Brawn GP under new owner Ross Brawn, the renamed team said in a statement on Friday.
Britain's Jenson Button and Brazilian Rubens Barrichello, last year's Honda line-up, will continue to drive for the British-based team with the first race in Australia little more than three weeks away on March 29.
Brawn GP, whose change of name is subject to the agreement of the governing International Automobile Federation (FIA), will use Mercedes engines under a deal with McLaren's partners.
No financial details were given.
"Honda Motor Company Limited and Ross Brawn are pleased to confirm that they have reached agreement to secure the future of the former Honda Racing F1 Team," the statement said.
"With immediate effect, Honda will pass ownership to Ross Brawn, Team Principal of the new Brawn GP Formula One Team."
Brawn, a former Ferrari technical director, looked forward to the new season after months of doubt about the team's survival following Honda's announcement in December they were pulling out due to the credit crunch.
"The past few months have been extremely challenging for the team but today's announcement is the very pleasing conclusion to the strenuous efforts that have been made to secure its future," he said.
"I would like to thank Honda for the fantastic co-operation and support we have received throughout this process, particularly those members of the senior management who were closely involved with concluding our agreement, and for the faith they have demonstrated in myself and our team."
The team said Nick Fry, the former Honda Racing chief executive who attended a news conference held by the Formula One Teams Association in Geneva on Thursday, will remain as part of Brawn's senior management team.
However the Brackley-based team, formerly the sport's biggest spenders, are likely to shed a considerable number of their 700 employees as they enter the season in more straitened circumstances.
They are due to hold a private shakedown of the new car at the Silverstone circuit in England on Friday before travelling to Spain for their first test of the year in Barcelona on Monday.
They will also hold a final pre-season test in Jerez.
Barrichello is Formula One's most experienced driver with a record 270 starts and his partnership with Button, reported in the British media to have taken a significant pay cut, represents a combined total of 423 grands prix.
Brawn's move, effectively a management buy-out, rescued both men's Formula One careers with 36-year-old Barrichello out of contract while Button was facing a year on the sidelines with all other teams completing their line-ups.
With the team's survival, Formula One will start the season with 10 teams -- one fewer than at the beginning of 2008 before Super Aguri folded.