The British Racing Drivers' Club (BDRC) have confirmed the British Grand Prix will remain at Silverstone up to and including the 2006 season.
Ecclestone said Silverstone needed improvement
The decision came after a deal was agreed with Formula One supremo Bernie Ecclestone, although it is subject to certain conditions being met.
Ecclestone had voiced concerns that Silverstone did not meet the standards of other F1 venues.
The agreement means it is unlikely London will host a Grand Prix.
The F1 chief, who bought the race rights to the British Grand Prix in April, had been involved in financial talks with Silverstone owners, BRDC, for over a year as regards to improving the circuit's facilities.
BRDC said in order to start work on a new paddock and pit complex, Ecclestone needed to sign off a finance package already agreed with his Formula One Management company and previous race rights holders Interpublic.
A statement released by the BRDC said: "Ecclestone has agreed to grant the rights to a promoter on the same contractual terms as other European countries ... for the Grand Prix to be held in the UK for the next two years."
It added Ecclestone had agreed the deal "on the understanding there will be significant long-term investment at Silverstone to raise the standards of the circuit and its facilities to the level of its international competitors."
BRDC president Sir Jackie Stewart said the future of the race should be safe in the short term, provided certain details - mainly finding a new promoter - were ironed out.
"All of the negotiations have not yet been concluded," said Stewart.
"We need to clarify the situation because we are not only working with Bernie, but also Her Majesty's Government, and we are still concluding our arrangement with Interpublic.
"We also need to clarify who the promoter will be for 2005 and 2006 and hopefully that will help us create an infrastructure that can afford the type of facilities that will have to be created for the long term.
"Overall though, I am cautiously optimistic."