Former world champion Kimi Raikkonen will return to Formula 1 next season after signing a two-year deal with Renault,
who will become Lotus in 2012.
The 32-year-old left F1 at the end of 2009 to pursue a career in rallying.
had talks with Williams about a return to F1 next season
, but a deal fell through.
"My hunger for F1 has recently become overwhelming," said Raikkonen. "It was an easy choice to return with Lotus Renault GP."
“My time in the World Rally Championship has been a useful stage in my career as a driver”
who won the title in 2007 with Ferrari,
added: "I have been impressed by the scope of the team's ambition. Now I'm looking forward to playing an important role in pushing the team to the very front of the grid.
"My time in the World Rally Championship has been a useful stage in my career as a driver."
There was confusion last week after Renault announced that Robert Kubica, who raced for the team before
he was injured in a rallying accident in February,
would not return to the sport next season.
the Pole's manager told BBC Sport that Kubica was still focused on returning in 2012.
Meanwhile, Raikkonen was strongly linked with a move to Williams in place of veteran racer Rubens Barrichello.
RAIKKONEN F1 FACT FILE
17 October 1979
- F1 debut:
2001 Australian GP
- Former teams:
Sauber, McLaren, Ferrari
- Career points:
- Fastest laps:
But on Tuesday, Renault confirmed Raikkonen, who has 18 wins and 62 podiums in F1, in the seat.
Russian driver Vitaly Petrov, who has just completed his second season with Renault, is likely to partner Raikkonen, but this has yet to be confirmed.
"Kimi's decision to come back to Formula 1 with us is the first step of several announcements which should turn us into an even more serious contender in the future," said Gerard Lopez, Renault chairman.
"Of course, we are all looking forward to working with a world champion."
Raikkonen entered F1 in 2001 with Sauber, raising eyebrows when he scored a point on his debut at the Australian Grand Prix.
In 2002, he moved to McLaren, where he spent five seasons before Ferrari signed him for 2007.
Kimi Raikkonen's return to F1 in 2012 means a quarter of the drivers on the grid will be world champions, creating a depth of talent arguably unmatched by any other era of the sport. But what to make of the comeback of a man who not long ago had tired of many aspects of F1? Is he coming back for the right reasons after failing in rallying? Will he be motivated by driving a midfield car? These are just some of the many questions that will not be answered until next year
Entering the final race of 2007 trailing championship leader Lewis Hamilton by seven points, when only 10 were available for a win, Raikkonen won the title by a single point after Hamilton suffered a gearbox problem on his way to seventh.
The Finn struggled to recapture that form in the next two seasons, where he was frequently outperformed by team-mate Felipe Massa, and left the team at the end of 2009 after the Italian squad paid off his contract to make room for double world champion Fernando Alonso.
Raikkonen has spent the last two seasons racing a Citroen in the World Rally Championship, where he had a career-best rally finish of fifth, and also competed in one-off races in the Nascar Truck Series and Nationwide Series.
Raikkonen secures first GP victory at Malaysia in 2003 (UK users only)