Felipe Massa and Fernando Alonso

Felipe Massa and Fernando Alonso

Ferrari on Wednesday announced that Fernando Alonso has signed a three year contract to race for the famous Italian team beginning in 2010. The 27-year-old Spaniard will replace Finn Kimi Raikkonen, who was contracted to stay with the Maranello squad for one more season.

"With common consent, we have agreed to terminate the contract binding me to Ferrari to the end of 2010," Raikkonen, who is expected to move to McLaren, is quoted as saying in the Ferrari press statement.

El Pais newspaper in Spain believes Raikkonen will receive €45 million for the split: substantially more than his agreed 2010 retainer.

"I am very sad to be leaving a team with which I have spent three fantastic years," said the 29-year-old, who won the drivers' championship at the end of his first season with Ferrari in 2007. "I have always felt at home with everyone here and I will have many happy memories of my time with the team," Raikkonen added.

Ferrari said Alonso's teammate will be Felipe Massa, with Giancarlo Fisichella the reserve driver.