Lewis Hamilton is to leave McLaren after signing to race for Mercedes from next season.
The move, predicted by BBC Sport's Eddie Jordan earlier this month, will be announced on Friday, causing huge repercussions throughout Formula 1.
It has forced Michael Schumacher out of Mercedes but it it is not clear whether the German legend will go back into retirement or look for another team.
Sauber driver Sergio Perez has signed as Hamilton's replacement at McLaren.
Hamilton's decision is a huge blow to McLaren, who will now have to do without the speed and inspirational talent of a man they have nurtured since he was 13 years old.
And it is a correspondingly massive coup for Mercedes, who have struggled since returning to the sport as a team owner in 2010 by buying the then world champion Brawn team.
Hamilton has been offered unequivocal number one status and will be partnered by German Nico Rosberg.
"[Lewis] wrote a huge chapter of his life and career with us," said McLaren team principal Martin Whitmarsh. "[He] was, and always will be, a fine member of an exclusive club: the McLaren world champions' club.
"It goes without saying that we all wish him well for the future."
Although Hamilton's salary at Mercedes will be larger than the one he was offered by McLaren, and he has more opportunity to earn money through personal sponsorships and endorsements, sources close to the 27-year-old insist he has switched teams with a view to long-term performance.
McLaren have the fastest car this season, while Mercedes have slipped backwards after a promising start to the year.
But Mercedes have sold the move to Hamilton on the basis that they are preparing for a huge push in 2014, when new chassis and engine rules are introduced.
Mercedes team principal Ross Brawn, who masterminded Ferrari's years of domination in the early 2000s, has been instrumental in persuading Hamilton the move is the right decision for his future.
Hamilton, whose failure to win more than one world title so far in his career rankles with him, is banking on Brawn being able to conjure a similar period of domination at Mercedes.
Schumacher's future is uncertain. Sauber team boss Peter Sauber said a week ago that he would offer the seven-time champion a drive if he became available.
But despite the Swiss team's strong performances this season, that would be seen as a significant comedown for a man who was expected to win on his return.
Instead, Schumacher's comeback after three years in retirement has been a huge disappointment - he has scored only one podium finish in three years.