Lewis Hamilton will end his 14-year association with McLaren at the end of the season and join Mercedes.
Press Association Sport understands Hamilton is to sign a three-year deal with the German manufacturing giant, worth a reported £15 million a year.
Although McLaren team principal Martin Whitmarsh admitted just three weeks ago there was "no plan B" should Hamilton quit, but it is understood Sauber's Sergio Perez is to replace the 27-year-old at the Woking-based marque.
There has been no immediate comment from either Mercedes or the Briton.
Hamilton's contract negotiations have been a long-running saga all season with reports that he was close to a deal with Mercedes emerging early in September.
More recent indications were, however, that the driver was in favour of staying with McLaren, the team that had nurtured him since he was in his early teens and that handed him his Formula One debut in 2007.
The Daily Telegraph said championship contenders McLaren were understood to have been informed of the driver's decision only on Thursday.
Mercedes had made no secret of their desire to sign Hamilton in place of seven-times champion Michael Schumacher, the sport's most successful driver, whose return to the sport after retiring from Ferrari in 2006 has been unremarkable.
Schumacher has been on the podium just once since he began his comeback in 2010 and has retired from half of the 14 races this season.
Mercedes took over champions Brawn GP at the end of 2009 but have had only one victory - Nico Rosberg's success in this year's Chinese Grand Prix.