BERLIN: Seven-times world champion Michael Schumacher has signed a one-year deal to return to Formula One racing with Mercedes GP for the 2010 season, Bild.de reported on Tuesday evening.

Having retired in 2006, Schumacher, who turns 41 on January 3, will be paid seven million euros (9.9 million US dollars) to be on the grid when the new season starts with the Bahrain Grand Prix on March 14 2010, Bild report.

It will be 1239 days after his last Formula One race in Sao Paulo at the Brazilian Grand Prix in October 2006 and Schumacher joins Mercedes in an all-German racing team after compatriot Nico Rosberg, 24, signed up last month.

Bild report Schumacher signed the contract on Tuesday at Mercedes' headquarters in Brackley, England, to return to Formula One having won 91 of his 250 Grand Prix races and started in Pole Position 68 times.

Michael Schumacher factfile

Schumacher had been due to make a remarkable return last season for Ferrari - for whom he acted as a consultant after retiring - as a replacement for the injured Felipe Massa but was unable to because of a neck injury.

Schumacher's signature is a major coup for Mercedes, who raced under the Brawn GP banner last season, and a blow to Schumacher's former stable Ferrari.

Ferrari president Luca di Montezemolo admitted last week he is distraught at the prospect of losing Schumacher to a rival team.

Di Montezemolo started working with Schumacher in 1996, when the German joined the Italian constructor from Benetton.

It was the Italian who first suggested to Schumacher he stand in for the injured Massa after the Brazilian's horrific crash at the Hungarian Grand Prix in July.

"It was me that rekindled his desire to race after Massa was injured in Hungary," the Ferrari chief had said.

Di Montezemolo admits he would have liked to see Schumacher back in a Ferrari but with Massa and Fernando Alonso already on their books for next season he simply could not offer the German a drive.

Schumacher will be linking up with Mercedes's team principal Ross Brawn, who was the brains behind all of Schmacher's seven world titles.

The German won the first of his World Drivers' Championship titles at Bennetton in 1994 and and was successful with the Italian team again in the 1995 season.

In 1996, he transferred to Ferrari where he proved virtually unbeatable between 2000 and 2004, winning five further world titles and there will be huge interest in the impact Schumacher and Brawn will have now for Mercedes.