Ferrari have announced they will keep Kimi Raikkonen for the 2016 season.
The Finn will continue to be partnered by Sebastian Vettel, who signed a long-term deal with the Scuderia last year when he joined from Red Bull.
Raikkonen's deal with Ferrari was due to expire at the end of the current campaign and reports last month in Italy indicated the veteran was poised to be replaced by Williams' Valtteri Bottas.
Red Bull driver Daniel Ricciardo was also touted as a potential replacement for the Finn.
Dogged by a litany of poor performances in qualifying, Raikkonen has consistently struggled to keep pace with Vettel this term, scoring just 76 points compared to the four-times world champion's haul of 160.
However, in a brief statement, Ferrari confirmed: "Scuderia Ferrari announces that it has renewed its technical and racing agreement with Kimi Raikkonen. The driver line-up next season will still consist of the Finnish driver and Sebastian Vettel."
Raikkonen added: "For me, to be able to stay another year at Ferrari means that the dream goes on.
"The Scuderia is my family, as I always said, it's here I want to end my career. I am more committed than ever and I want to say thank you to the people who gave me this chance."
The announcement is likely to have significant repercussions for the rest of the 2016 driver market, which has effectively been in lock-down while Ferrari deliberated over whether or not to keep the 2007 world champion.
But the news is also likely to intensify recent suggestions that Ferrari are keeping tabs on Toro Rosso starlet Max Verstappen with a view to appointing the teenager as Raikkonen's successor in 2017.
Sauber are the only other team to formally confirm their driver line-up for next year, announcing at last month's Hungarian GP that both Felipe Nasr and Marcus Ericsson would be kept on.
As both Mercedes drivers, Lewis Hamilton and Nico Rosberg, are tied to what the team have described as 'multi-year deals', McLaren are likely to become the principal focus of paddock gossip in the coming weeks following Jenson Button's recent reluctance to commit his future to the team.
McLaren youngster Stoffel Vandoorne, currently leading the GP2 championship, is thought to be in pole position to replace Button if the Englishman departs.