Red Bull has confirmed it will continue to use Honda's engine technology after the Japanese manufacturer withdraws from Formula One next year.
Honda announced its departure in October last year, leaving Red Bull with very few options to power its cars beyond the end of the 2021 season.
Its favoured choice was to reach an agreement with Honda to use its technology in 2022 and beyond, but it required a freeze in engine development as Red Bull does not have a facility capable of developing a power unit.
Last week, an agreement between F1, the FIA and rival teams was reached to freeze engine development between 2022 and the end of 2024, paving the way for Red Bull to continue to use Honda engines until all-new regulations are introduced for the 2025 season.
The only alternative option was for Red Bull to return to Renault power next year, after F1's other two engine manufacturers, Ferrari and Mercedes, made clear they would not supply a main rival.
The new deal also applies to Red Bull's junior team, Alpha Tauri.
"We have been discussing this topic with Honda for some time and following the FIA's decision to freeze power unit development from 2022, we could at last reach an agreement regarding the continued use of Honda's hybrid power units," Red Bull's motorsport advisor Helmut Marko said. "We are grateful for Honda's collaboration in this regard and for helping to ensure that both Red Bull Racing and Scuderia AlphaTauri continue to have competitive power units."
A new company, Red Bull Powertrains Limited, has been set up to run the project out of Red Bull's main F1 base in Milton Keynes.
"The establishment of Red Bull Powertrains Limited is a bold move by Red Bull but it is one we have made after careful and detailed consideration," Marko said. "We are aware of the huge commitment required but we believe the creation of this new company is the most competitive option for both teams."
Red Bull team principal Christian Horner added: "This agreement represents a significant step for Red Bull in its Formula One journey. We were understandably disappointed when Honda made the decision to leave the sport as an engine manufacturer, as our relationship yielded immediate success, but we are grateful for their support in facilitating this new agreement.
"Honda has invested significantly in hybrid technology to ensure the supply of competitive power units to both teams. We now begin the work of bringing the power unit division in-house and integrating the new facilities and personnel into our Technology Campus.
"In the meantime, we are fully focused on achieving the best possible results in what will be Honda's final season as an official power unit supplier."
Honda made its decision to leave F1 in order to focus more its research and development budget on fully electric vehicles.
The Japanese engine manufacturer, which has a long but patchy history in F1, returned to the sport in 2015 with McLaren but failed to win a race until it joined forces with Red Bull in 2019.