The German car group paid £117m ($190.8m) for the Cosworth engine-making group as part of the deal to buy Rolls Royce Motor Cars from Vickers.

But it has decided to sell the racing division to Ford, allowing the 30-year relationship between the American and British companies to continue.

The financial details of the sale have not been disclosed.

Racing heritage

Audi will retain the engineering, development, casting and manufacturing operations at Cosworth - part of which makes engines for Rolls-Royce and Bentley cars.

The deal will end reported concerns at Ford that the sale of Cosworth to the VW group could have jeopardised its long collaboration with the engines maker.

Cosworth is key to Ford's high profile motorsport successes, on which it builds much of its marketing operations.

Cosworth Racing will continue to be based in Northampton.

Martin Whitaker, motorsport director for Ford of Europe said: "Cosworth has played a significant role in Ford's motorsport heritage and we are delighted with the outcome of the negotiations."

"The agreement will allow Cosworth Racing to continue to draw on Ford's global engineering capabilities in meeting our commitments in Formula One, Indycar and Touring Car Racing."

Crucial deal

Vickers confirmed its sale of Cosworth to Audi late on Saturday night, saying it would use the proceeds to support its marine technology, turbine components and defence systems.

Sir Colin Chandler, chairman of Vickers, said: "Vickers has secured excellent value from the sale of Rolls Royce Motor Cars and Cosworth at a time when prospects for these businesses indicate that they will benefit from a strong new automotive industry owner.

"Moreover, within the Volkswagen Group, both Rolls Royce and Cosworth will be able to grow and expand their unique blend of British engineering expertise."