Although Mercedes did not reveal specifics of Hamilton’s contract extension it is understood that the four-time world champion will earn up to £40million a year until the end of 2020.
The 33-year-old Englishman’s new contract cements his status as Britain’s biggest sporting earner as well as the best-paid driver in Formula One history.
Mercedes’ announcement comes ahead of the team’s home race in Germany with Hamilton trailing Sebastian Vettel in the championship by eight points.
Hamilton said: “This contract extension has basically been a formality since (team principal) Toto (Wolff) and I sat down during the winter, so it’s good to put pen to paper, announce it and then get on with business as usual.
“I have been part of the Mercedes racing family for 20 years and I have never been happier inside a team than I am right now.
“We are on the same wavelength both on and off track – and I am looking forward to winning more in the future and shining even more light on the three-pointed star. I’m very confident that Mercedes is the right place to be over the coming years.”
Hamilton will be nearing his 36th birthday at the conclusion of his latest contract, and he has made no secret of his desire to forge a career in fashion or music.
I have been in the Mercedes Family since 1998. I am forever grateful for their continued support, love and protection over these years. I’m incredibly proud of what we have achieved together and even more excited for the future!👊🏾 @MercedesAMGF1 #grateful #letsgo #announcelewis pic.twitter.com/sXo0UnKeIs
— Lewis Hamilton (@LewisHamilton) July 19, 2018
But the Englishman’s immediate future remains in a sport that has helped transform him from modest beginnings in Stevenage, Hertfordshire, into a global multi-million-pound superstar.
Hamilton is chasing his fifth world crown this season to join Michael Schumacher and Juan Manuel Fangio as the only other driver to have won more than four titles.
He is second to Schumacher, in terms of grands prix wins, and holds the record for the most pole positions in the history of the sport.
Wolff said: “We signed the final documents this week and didn’t want to keep people waiting any longer!
“There is not much about Lewis as a Formula One driver that hasn’t been said already – he is one of the all-time greats and his track record speaks for itself.
“But what I enjoy most about working with him is getting to know the man inside the racing helmet: his relentless drive for self-improvement, his emotional intelligence as a team member and his loyalty to those around him.”
Hamilton’s decision to stay with Mercedes is set to have a domino effect on the driver market for 2019.
It is likely that Hamilton will be partnered by Valtteri Bottas for a third year with Mercedes content that the Finn is doing enough to retain his seat.
Bottas is fifth in the standings, 59 points adrift of Hamilton, but his campaign has been blighted by bad luck.
Daniel Ricciardo, a two-time winner this season, is out of contract with Red Bull, but Mercedes do not appear to want to risk rocking their stable ship.
Vettel is due to stay at Ferrari for a further two years. The identity of his team-mate next season, however, is uncertain with highly-rated rookie Charles Leclerc mooted to replace Kimi Raikkonen.
The team put a photo on social media of a contract waiting to be signed, alongside the word “#Announce…”
The 33-year-old joined Mercedes from McLaren for the 2013 season and has won three of the past four World Championships.
— Mercedes-AMG F1 (@MercedesAMGF1) July 19, 2018
Mercedes’ chief strategist James Vowles is in the spotlight after his strategy blunder – the team’s third in nine races this season – and his very public apology to Hamilton over the team radio.
Hamilton, who is bidding to become the first driver to win six British Grands Prix, and the first to win five in a row, insists it is not only his Mercedes team faltering this season, and backed his team to turn it around.
But the 33-year-old Englishman also hinted that Mercedes can ill-afford further errors in his quest for a fifth world championship.
“I hope (the mistakes) will not be a title decider, but I can’t predict what will happen going forward,” Hamilton said.
“There are a lot of tough calls for teams to make, but some of them, for sure, are easier than others.
“I do feel like I have the best strategy team behind me. Look at how many wins I have had at this team.
“We have had far more success than we have had failures, and nobody is perfect. It would be boring if that was the case.”
Hamilton was awarded three days off by Mercedes after the Austrian race, and spent the time preparing for Sunday’s third race in as many weeks at his home in Monaco.
#LH44: “The experiences we have had have united us more than any other year. It has brought us closer – made us stronger. The team is super on it and confident we have done everything we can to make sure it doesn’t happen again.” 🇬🇧 #BritishGP pic.twitter.com/FAAUU4DQVq
— Mercedes-AMG F1 (@MercedesAMGF1) July 5, 2018
The Briton insists that the team’s capitulation at Spielberg will act as a catalyst in his championship battle, rather than a hindrance.
“I look at what happened in Austria as a positive and it reminds me how passionate I am,” Hamilton added.
“We win and lose as a team and what’s happened has reunited us. The will to win is still there, and there are fixes for everything.
“What doesn’t kill you makes you stronger and the spirit is stronger than it has ever been.”
Hamilton’s new £40million-a-year contract extension is not expected to be announced this week, with Mercedes wary of placing further pressure on their star man ahead of his home race.
Hamilton will start as the favourite to win in front of nearly 140,000 partisan British fans following his recent domination at Silverstone.
“It would be great (to retake the championship lead),” Hamilton said. “Coming into this weekend there has been talk of a historic win, but if I am honest it has just been an incredible journey since my debut in 2007.
“I am really grateful to be in a position to fight for a sixth win at Silverstone. Not many drivers get to do that and I am privileged to be in that position. The support here is unlike anywhere else.”