Britain's Justin Wilson has lost his Jaguar drive to Austrian Christian Klien.
Klien impressed at the Valencia test
The Ford-owned Formula One team confirmed that 20-year-old Klien will race alongside Australian Mark Webber next year.
Klien, runner-up in German Formula Three this year, impressed Jaguar with his speed and attitude during testing at Valencia recently.
"There is no doubt in our minds about the potential of this exciting new young talent," said Jaguar racing managing director David Pitchforth.
"Justin's speed, focus and experience are exemplary and our decision to put Christian in the race car in no way reflects upon Justin's clear ability as a competitive racing driver.
"We are, however, in discussions with Justin about how Jaguar racing can help with his future career."
Klien's arrival leaves Wilson with an uncertain future as Minardi and Jordan are the only teams who have yet to finalise their driver line-ups for next season.
Wilson competed in the last five races of 2003 for Jaguar after switching from Minardi to replace Brazilian Antonio Pizzonia.
New rules for 2004 allow the six lowest-ranked teams to run a third car in Friday practice at Grands Prix.
But the driver cannot have competed in six or more races during the past two seasons, which would exclude Wilson unless the rule was changed.
"It's disappointing," 25-year-old Wilson told the Daily Mirror newspaper. "I have known this was on the cards for a while.
"I know why they have made the decision they have and there is little I can do about it.
"I'm still waiting to see what happens about the rule governing test driving. I would like to remain with the team in
a test driving role. Minardi is also a possibility."
Klien joins Jaguar with lucrative backing from Austrian energy drink company Red Bull, who are reported to have increased their sponsorship from £6m to more than £10m in a multi-year deal.
"Christian was in as much control of himself as he was the car," said Pitchforth of the Valencia test.
"He was extremely calm, composed and didn't seem remotely fazed by his first experience with a Formula One car.
"He worked very well with the race engineers and demonstrated increasing speed as he became familiar with the
"Our decision to employ him as a race driver was based on merit, potential and speed."