Red Bull will continue with Renault engines in 2016 and the power-units will be named after the luxury watch brand TAG Heuer.
The move by the former world champions comes after months of uncertainty about Red Bull's future in Formula 1.
The team scrapped its previous contract with Renault, which ran until the end of next year, and was looking around for an alternative supply.
After failing to find one, Red Bull have negotiated a new Renault deal.
Renault will be assisted in its development of the engine by British company Ilmor, which has been acting as a consultant for Red Bull on engine design for more than a year.
Red Bull team principal Christian Horner said Ilmor's involvement "gives us confidence" in Renault's ability to improve the engine's performance.
Renault announced on Thursday night it was returning to F1 as a constructor by taking over the Lotus team.
Relations between Red Bull and Renault soured as the car giant failed to produce a competitive engine under the new turbo hybrid rules introduced into F1 in 2014.
After telling Renault they no longer want to be their official partner, Red Bull were rejected by Mercedes and Honda and were unable to reach a satisfactory deal with Ferrari.
The team therefore had to renegotiate its contract with Renault, and the TAG Heuer deal is way of helping the team pay for the engines.
TAG Heuer has moved to Red Bull after ending its 31-year relationship with McLaren.
That started when the brand's parent TAG paid for the development of a Porsche engine that, under the TAG name, powered McLaren to three consecutive drivers' titles, in 1984 with Niki Lauda and in 1985 and '86 with Alain Prost.
The TAG Heuer brand split from the TAG parent group in 1999 when it was sold to the luxury goods group LVMH.
The wider TAG Group is still run by Mansour Ojjeh, a 25% owner of McLaren Group.