Mercedes-Benz has signed an agreement to enter Formula E, which gives the F1 championship team the option to join the all electric single-seater series in its fifth season.
Formula E plans to change to single-car races for the 2018/19 season, and could expand from 10 teams to 12, which means that one of the two additional slots is now reserved for the German carmaker.
Toto Wolff, Mercedes motorsport boss, said: "We have been watching the growth of Formula E with great interest.
"At the current time, we are looking at all the options available in the future of motor racing, and we are very pleased with an agreement that secures us an opportunity to enter the series in season five."
Mercedes is contractually bound to F1 until the end of the 2020 grand prix season. The team has dominated Formula One since regulations changed to the current turbo-hybrid norms in 2014, with Lewis Hamilton winning multiple victories.
Mercedes' move to Formula E would be the latest of major additions to the all electric series, which starts its third season this Sunday.
Jaguar too has announced its entry and will make its debut in the 2016/17 season opener, scheduled to take place in Hong Kong. Also, BMW confirmed an engineering partnership with the Andretti team.
French brand Renault, won last year's drivers' and teams' titles with the factory e.dams team, and Citroen's sister brand, DS competes with Virgin Racing.
Other teams in the Formula E series include Mahindra, Dragon Racing, backed by Faraday Future, electric vehicle land speed record specialist Venturi, and the Chinese-owned NextEV.
A Formula E statement confirmed the current 10 teams "are all expected to continue in season five and beyond" and series CEO Alejandro Agag said "Mercedes would be a great addition to that growing line-up".