British driver Jolyon Palmer is to leave the Renault team after Sunday’s Japanese Grand Prix.
Palmer, who has had a difficult season alongside Nico Hulkenberg, will be replaced by Spaniard Carlos Sainz, who has already been signed for 2018.
Sainz’s place at Toro Rosso will be taken by Russian Daniil Kvyat.
It is a reprieve for Kvyat, who was dropped for Frenchman Pierre Gasly last month but the two will be team-mates at the next race, the US Grand Prix.
Palmer, 26, said: “It’s been an extremely challenging season and I’ve been through a lot in the past three years, but it’s been a tremendous journey overall with the team.
“I can look back proudly at the performance in the second half of last season, my first point in Malaysia and of course reaching a career high of sixth place in Singapore this year.
“I wish the team all the best for the future. My immediate focus is now on achieving the best possible result in the Japanese Grand Prix, and then I can assess my options for the future.”
Palmer looks to have limited options to race in F1 next year.
There is a seat available at Williams alongside Canadian Lance Stroll, but they are deciding between current driver Felipe Massa and Robert Kubica, whose ability to return from life-changing injuries sustained in a 2011 rally accident is to be assessed by the team at two tests later this month. Reserve driver Paul di Resta is also in with an outside chance.
Renault have been trying to negotiate the end of Palmer’s tenure for several months, but until now the Englishman had refused their offers of a pay-off for the rest of his contract.
The team did not say what had broken the deadlock now.
Renault Sport managing director Cyril Abiteboul said: “Since Renault’s return to F1, Jolyon has been highly dedicated in an evolving environment. He has shown great personal qualities and we wish him all the best in his future career.”
Palmer’s F1 career began as reserve driver for the Lotus team in 2015 and he was signed as their race driver for last season before Renault bought the outfit back.
After a slow start, he showed well against Kevin Magnussen last season, becoming increasingly competitive and shading the Dane in the second half of the year.
But Hulkenberg has proved a more challenging adversary and Palmer has been about 0.6secs behind the German on qualifying pace on average and scored eight points to his team-mate’s 34.
Toro Rosso have not said who will drive for the rest of their season, only that Kvyat will return to the team alongside Gasly at the next race in Austin, Texas on 20-22 October.
There are a further three races after that in 2017 – in Mexico, Brazil and Abu Dhabi.