Alex Albon will return to Formula 1 in 2022 with Williams, taking the seat vacated by George Russell's promotion to Mercedes-AMG.
The 25-year-old Anglo-Thai driver is this season racing in the DTM sports car series, having been dropped by Red Bull Racing post-2020.
Williams has also confirmed that he will line up alongside Canadian incumbent Nicholas Latifi, who in addition to a significant sponsorship package has brought a step-up in performance this season.
Although dropped from Red Bull's two-team grand prix stable, Albon has retained the support of the company, serving as its reserve driver and getting an AlphaTauri livery for his AF Corse-run Ferrari 488 in the DTM.
Red Bull has won the second Williams seat over Mercedes, which is reportedly keen to promote its Formula E champion, 26-year-old Nyck de Vries, into F1.
It's now strongly rumoured that the Dutchman could end up racing alongside departing Mercedes driver Valtteri Bottas at the Alfa Romeo F1 team in 2022, displacing Ferrari-backed Antonio Giovinazzi.
Williams team boss Jost Capito said: "We're extremely excited by our new line-up, with both drivers bringing a great blend of youth and experience that will not only be a great fit for the team but also help us take the next step in our journey.
“Alex is one of the most exciting young talents in motorsport yet comes with a large amount of F1 experience from his time at Red Bull."
The Williams deal is something of a reprieve for Albon, who had impressed sufficiently at Red Bull junior team AlphaTauri at the start of 2019 to gain a mid-season promotion to the senior squad.
He could have won in Brazil, but for being punted off the track by Mercedes' Sir Lewis Hamilton, and a repeat of this scenario in the 2020 season-opener in Austria visibly damaged his confidence.
He scored two podium positions but was clearly struggling (Note: "They race me so hard" over team radio at the Nürburgring) and failed to match Max Verstappen, and was then overlooked in favour of F2 front-runner Yuki Tsunoda for a seat back at AlphaTauri.
He said today: "When you take a year out of F1, it’s never certain you will make a return, so I’m extremely thankful to Red Bull and Williams for believing in me and helping me on my journey back to the grid."
This is a major positive from the story, as Red Bull has often come in for criticism over the way it has treated struggling young drivers in the past. Perhaps it has finally learned its lesson from Pierre Gasly, who struggled to adapt to the senior car but following his demotion back to AlphaTauri has consistently performed outstandingly. (Who could forget his emotional shock victory at Monza?)
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Delighted for Alex Albon. I always thought he was a good racer and he is certainly better that Tsunado who has not done any good at all this year. I am surprised the Alpha Tauri kept him on. He will need to improve big time next year or go drive somewhere else if he does not.
Reasonably driver in a quickly improving car, be interesting if he embarrases Latifi like GR did, if so it really is time for Latifi to hang his helmet up