Marcus Ericsson will stay at Sauber next year for the 2018 Formula 1 world championship.
He'll have a new partner for the season, with Formula 2 champion Charles Leclerc stepping up to make his F1 race début in Melbourne.
The announcement was made by Ferrari chairman Sergio Marchionne on Saturday. He was speaking in Milan at an event marking the launch of Sauber's new partnership with Alfa Romeo.
As the leading light of the Ferrari Driver Academy, Leclerc's promotion to the top level of motorsport had been widely rumoured for months.
Leclerc has already participated in eight F1 free practice sessions - four with Haas last year, and four with Sauber this season.
But there had been doubts about Ericsson's roles, despite the fact that his personal sponsors are also involved in Longbow Finance, the group that bought out Sauber in 2016.
Ericsson has been with the team since 2015, after an initial season with the now-defunct Caterham squad. He's started 76 Grand Prix races but ended 2017 without any points.
It's believed that Ferrari had been pressing for another of their development drivers, Antonio Giovinazzi, to take the race seat. But with Ericsson getting the nod, the 23-year-old Italian will now become the team's test and reserve driver.
Giovinazzi made his F1 bow this year subbing for an unwell Pascal Wehrlein in the first two races of the season.
As expected, Mercedes protégé Wehrlein is left out of the line-up. His only remaining hope of a seat for next year is at Williams, but this now seems bound to go to Robert Kubica.
Since the departure of former team principal Monisha Kaltenborn, Sauber has increasingly positioned itself as a Ferrari satellite team. A plan to run Honda engines in 2018 was cancelled by new boss Frederic Vasseur.
Instead, the team will use Ferrari power elements badged with the iconic Alfa Romeo brand. The deal is understood to include an agreement for it to take at least one of Ferrari’s young drivers next season.
"This agreement with the Sauber F1 team is a significant step in the reshaping of the Alfa Romeo brand," Marchionne said earlier this week. "[Alfa] will return to Formula 1 after an absence of more than 30 years," said Marchionne.