Japan's Kazuki Nakajima will race for Williams in Formula One next year.
The team said the 22-year-old, who was promoted from test driver for a debut in the season-ending Brazil Grand Prix, would partner German Nico Rosberg.
The announcement appears to end speculation linking Rosberg to McLaren as Fernando Alonso's replacement.
If Rosberg is out of the frame at McLaren, Renault's Heikki Kovalainen would be favourite to join the team but he has also been linked with Toyota.
The driver market is in flux while Alonso's future remains in doubt.
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The Spaniard, who left McLaren last week, has options at Renault, Toyota and Red Bull, but Renault appear to be edging ahead in the race to sign the double world champion.
One source close to Renault even told BBC Sport he was "99% certain" that Alonso would return to the team with which he won both his drivers' titles.
Renault team boss Flavio Briatore is said to be putting together a multi-million-pound deal to entice Alonso back.
Briatore is, according to BBC Sport's sources, prepared to relax his stated requirement that Alonso commit to spending more than a year at the team.
Alonso is said to want to sign a one-year deal in the hope that a seat at Ferrari will become available in 2009.
Renault are believed to be committed to promoting their Brazilian test driver Nelson Piquet Jr to a race seat, and he is likely to partner either Alonso or Kovalainen.
If Alonso joins Renault, Briatore has the option of selling Kovalainen's contract to either McLaren or Toyota.
There are also rumours that Australian Mark Webber - who, like Kovalainen, is managed by Briatore - could move to Renault if Alonso prefers to go to Red Bull.
Veteran Giancarlo Fisichella is operating on the basis that there will be no vacancy for him to stay for a fourth consecutive season a Renault and is talking to other teams.
Nakajima's promotion from his role as test driver comes after he impressed in his debut for Williams at last month's Brazilian Grand Prix, where he replaced Alexander Wurz following the Austrian's retirement from racing.
Team owner Frank Williams said: "Kazuki has impressed over the past year - he has the pace and right aptitude to develop into a competitive racer."
Nakajima added: "This is the crowning of a great year for me."
Nakajima, who has been a member of the Toyota Driver's Programme since 2003, was also named GP2 Series Rookie of the Year after finishing fifth in the championship this season.
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