BMW Sauber today confirmed they are to withdraw from Formula One at the end of the 2009 season.
The announcement, made at the team's headquarters in Munich and on their website, means BMW are the second major manufacturer to pull out of the sport in the space of eight months following Honda's withdrawal in December.
The news comes ahead of the imminent signing this week of a new Concorde Agreement, the commercial document that governs F1 and binds the teams to the sport for the length of the contract.
BMW made their decision after a management board meeting yesterday.
"Of course, this was a difficult decision for us, but it's a resolute step in view of our company's strategic realignment," said Dr Norbert Reithofer, chairman of the Board of Management of BMW.
"Premium will be increasingly defined in terms of sustainability and environmental compatibility. This is an area in which we want to remain in the lead.
"We are continually reviewing all projects and initiatives to check them for future viability and sustainability.
"Our Formula One campaign is thus less a key promoter for us."
BMW had made rapid strides in F1 since taking over Sauber ahead of the 2006 season, scoring two podium finishes and claiming fifth in the constructors' championship that year.
In 2007, the team finished second in the constructors', aided by McLaren's exclusion in the wake of the 'spy saga', amassing 101 points.
Then last season Robert Kubica scored BMW Sauber's first victory at the Canadian Grand Prix en route to the team taking 135 points and finishing behind Ferrari and McLaren in the constructors'.
At the start of the season, BMW Motorsport boss Mario Theissen insisted it was the team's intention to push for both titles.
But the team have been a major disappointment after failing to get to grips with the introduction of new regulations, taking just eight points from 10 grands prix to date.
BMW's issues have been compounded by the fact that despite Ferrari and McLaren making similarly slow starts, those two teams are back up to speed, leaving the German marque at the back of the grid.
"Mario Theissen has been in charge of our motorsport's program since 1999," added Reithofer.
"We have scored a large number of successes in this period, including some in Formula One racing.
"I would like to express my sincere gratitude to Mario and his team for this."
BMW's withdrawal is a major surprise as they have been a pivotal player in the recent negotiations between the FIA and the Formula One Teams' Association to reduce costs in the sport.
The signing of the new Concorde had been viewed as the end of the saga, with the 13 teams that were due to compete likely to do so through to at least 2012.
But BMW are to now focus the resources to be saved on F1 into the development of new drive technologies and sustainability.
Dr Klaus Draeger, member of the Board of Management responsible for development, confirmed BMW Sauber's recent poor results had played a major part in the thinking behind the team's exit from F1.
"It only took us three years to establish ourselves as a top team in Formula One," said Draeger.
"Unfortunately, we were unable to meet expectations. Nevertheless, our 10 years of Formula One experience have had a major impact on our development engineers.
"We have racing to thank for numerous technological innovations, as well as the competitive spirit that drives us to develop mass-produced cars."
It is certain redundancies will follow, both in Munich and at their other plant in Hinwil, Switzerland.
Draeger added: "We will develop and assess various scenarios and do our best to find a solution for the employees in Hinwil and the staff members involved in the Formula One project in Munich.
"We are aware of the responsibility we shoulder and will inform the staff as soon as we can make a clear statement."
Theissen was fully appreciative of the executive decision made to end the team's involvement in F1.
"We would all have liked to continue this ambitious campaign and show that this season was just a hiccup following three successful years," said Theissen.
"But I can understand why this decision was made from a corporate perspective.
"We will now focus sharply on the remaining races, demonstrate our fighting spirit and put in a good result as we bid farewell to Formula One racing."
BMW will continue its participation in the World Touring Car Championship, Formula BMW, the American Le Mans Series and other endurance races, as well as world super bikes.
As for drivers Kubica and Nick Heidfeld, they will now be on the lookout for another team for next season.
In a statement released by the FIA, motor racing's world governing body insist they hopeful the sport has seen the last departure of a major manufacturer.
"The FIA regrets the announcement of BMW's intended withdrawal from Formula One, but is not surprised by it," read the statement.
"It has been clear for some time that motor sport cannot ignore the world economic crisis.
"Car manufacturers cannot be expected to continue to pour large sums of money into Formula One when their survival depends on redundancies, plant closures and the support of the taxpayer.
"This is why the FIA prepared regulations to reduce costs drastically.
"These measures were needed to alleviate the pressure on manufacturers following Honda's withdrawal, but also to make it possible for new teams to enter.
"Had these regulations not been so strongly opposed by a number of team principals, the withdrawal of BMW and further such announcements in the future might have been avoided.
"Nevertheless, as a result of a sustained cost-cutting campaign by the FIA, new measures are in the process of being agreed which should make it easier for new teams to enter and enable existing ones to participate on much-reduced budgets.
"It is no secret these measures do not go as far as the FIA would have liked, but a compromise was needed in the interests of harmony in the sport.
"Hopefully it will be enough to prevent further withdrawals and provide a solid foundation for Formula One.
"As the guardian of the sport, the FIA is committed to ensuring Formula One remains financially sustainable for all competing teams and it will always act to ensure that this remains the case."