Mercedes have announced that Nico Rosberg has signed a new two-year contract with the Formula 1 team.

The 31-year-old's future had been the subject of wide speculation, but he has now confirmed that he will remain with the constructors' champions until the end of 2018.

There were suggestions that Rosberg's rocky relationship with teammate Lewis Hamilton could result in one of the drivers being dropped.

Despite the pair colliding twice on the track in the first half of this season, they will remain Mercedes drivers for the next two years.

Rosberg, who joined the team in 2010, looked as though he was going to snatch the championship crown off Hamilton after winning the first four races of the campaign, but his lead in the rankings has since been restricted to just one point ahead of this weekend's Hungarian Grand Prix.

Hamilton has won four of the last five races.