Jolyon Palmer will continue to drive for Renault for the 2017 season.
The 25-year-old will partner the recently-recruited Nico Hulkenberg at the French team as they build up to competitiveness following their return to F1 as a factory entry this year.
Palmer said he was "over the moon" to be staying with Renault.
The British driver joined the team's predecessor, Lotus, as third driver in 2015 before graduating to race driver with Renault for the 2016 season.
It was also revealed on Wednesday that Dane Kevin Magnussen would be leaving Renault to move to the US-based Haas team for 2017.
Renault returned to Formula 1 as a constructor this season after taking over the Lotus team.
Palmer, who has started 18 Grands Prix to date, scoring his first World Championship point at this year's race in Malaysia, added: "I can't wait to reward the team's faith in me on track.
"Having worked out of Enstone [in Oxfordshire] since 2015, I can fully appreciate the development of the infrastructure this year. This means I share the excitement of the team looking to 2017 and our new car.
"For me, it's been a steep learning curve driving in Formula 1 and I know that I am performing better than ever, and that there's still more to come."
Jerome Stoll, Renault Sport racing chairman, said: "We are delighted to retain Jolyon as our driver for the 2017 season.
"Jolyon has shown his hunger to develop with us as the team grows and we have been impressed with his increasingly strong performances on track as the season has progressed.
"We are confident that the combination of Jolyon and Nico Hulkenberg offers a very promising driving force to meet our goals."