Nick Heidfeld will replace Pedro de la Rosa in the Sauber team for the remaining five races of the 2010 Formula One season.
Heidfeld, 33, previously drove for the team from 2001 to 2003, when they were a privateer, and from 2006 to 2009 when they were owned by BMW, but he was left without a drive for 2010 when the German manufacturer pulled the plug on its involvement in Formula One.
The Swiss team endured a disappointing start to the year, having looked competitive in pre-season testing, but have gradually improved as the campaign has progressed, with Kamui Kobayashi scoring points on five occasions.
Spanish veteran De la Rosa, 39, has struggled to match the pace of his Japanese team-mate, who was last week rewarded with a contract for 2011, and has paid the price by making way for Heidfeld, who has served as Mercedes' test and reserve driver so far this year.
Team boss Peter Sauber said in a team statement: "It was a hard decision for me to make as a team principal and I want to thank Pedro for his professionalism.
"By signing Nick we have a driver we know extremely well who will help us to further judge the comparative potential of our car."
De la Rosa, who only returned to the sport at the start of the year, spoke of his disappointment at the decision.
"I am surprised by the team's decision, but I respect it and would like to wish everyone good luck for the remainder of the season," he said. "I still intend to be in Formula One for 2011."
Heidfeld, who has also driven for Prost, Jordan and Williams since making his debut in 2000, is relishing the chance to return to racing.
"I'm looking forward like crazy to having the opportunity to go racing again in a good car in Formula One from the Singapore Grand Prix onwards. After the last months I'm even more motivated than ever," said the German, who has yet to win in 167 career starts but has finished second on eight occasions.
"For me it is like coming home, as I raced for seven years in total for the team from Hinwil. Without doubt I will be feeling at home straight away and this should help me to familiarise myself as soon as possible with the car. I want to thank Peter Sauber for the faith he has put in me."