World championship leader Nico Rosberg has ended speculation regarding his future by signing a new two-year contract to remain with Mercedes.

The German had been heavily linked with a move away from the Silver Arrows, but the new deal will now see him remain with the team until the end of the 2018 season.

The 31-year-old will continue to race alongside team-mate Lewis Hamilton during that time, as the Brit is also contracted to the German team for the next two years, after signing a new deal last season.

Mercedes confirmed the news of Rosberg’s new contract on social media, with former F1 driver Gerhard Berger having led negotiations for the German, while he focused on trying to win his first drivers’ championship title.

Rosberg, who originally joined Mercedes following their return to the sport as a team owner in 2010, is currently a point clear of Hamilton at the top of the standings, although he has seen his lead cut significantly in recent weeks.

The former Williams driver will be hoping to seize back the initiative at this week’s Hungarian Grand Prix, as he has only won one of his last six races, after initially making a flying start to the campaign.

Rosberg is available at 4.00 to secure a victory in Budapest on Sunday, while Hamilton is on offer at 2.05 to make it three race successes in a row, following his triumphs in Britain and Austria.