Channel 4 will replace the BBC as the new home of Formula 1 on terrestrial TV from 2016.
The broadcaster has signed a new deal with the sport to show ten live races per season, as well as highlights of all other races. It has also committed to showing every live race in full without ad breaks.
F1 chief executive Bernie Ecclestone admitted he was disappointed that the BBC could no longer honour its existing contract, but added that he was happy that it would continue to be shown on terrestrial TV. Sky Sports will continue to show every F1 race live.
“I am sorry that the BBC could not comply with their contract but I am happy that we now have a broadcaster that can broadcast Formula 1 events without commercial intervals during the race," he said.
“I am confident that Channel 4 will achieve not only how the BBC carried out the broadcast in the past but also with a new approach as the world and Formula 1 have moved on.”
The BBC's Formula 1 contract was due to expire in 2018, but the BBC has "reluctantly" chosen to end its deal early in order to save money.
The BBC admitted in November that it expected to lose more sports rights in the coming year, as it aimed to plug a £35 million hole in licence fee finances.
Ecclestone revealed that the BBC had already tried to negotiate the terms of existing three-year deal, but said at the time that he wanted the broadcaster to honour its contract. “They don't have a lot of choice because they've got a contract with us. They're there for another three years,” he told the Daily Telegraph.
Barbara Slater, director of BBC Sport, explained the decision in a BBC blog post: "No Director of Sport wants to be responsible for reducing the amount of sport on BBC TV. But the current financial position of the BBC means some tough and unwanted choices have to be made. There are no easy solutions; all of the options available would be unpopular with audiences."
She added that "a significant chunk" of BBC Sport's savings target had been delivered through terminating its Formula 1 deal, along with sharing Six Nations coverage with ITV and giving up live coverage of golf's Open Championship.
"Any decision to have to stop broadcasting a particular sport or sporting event is hugely disappointing and taken reluctantly," she added. "As part of the exit arrangements we are extending our radio rights deal to 2021 and will continue to cover the sport via our sports news service and the BBC Sport website."
Channel 4 is yet to confirm who will be part of its presenting team. BBC lead presenter Suzi Perry tweeted a picture of her and co-presenters Eddie Jordan and David Coulthard as the news broke with the caption, 'Love this gang'.
More like this
Channel 4 chief executive David Abraham said, “Formula One is one of the world’s biggest sporting events with huge appeal to British audiences. I’m delighted to have agreed this exciting new partnership with Bernie Ecclestone to keep the sport on free-to-air television.”
The broadcaster's Chief Creative Officer Jay Hunt added that showing live races free to air without adverts would be a television first.
"Channel 4 and Formula One are the perfect partnership," she said. "We've the same appetite for innovation and we'll be demonstrating that to fans by becoming the first free-to-air commercial broadcaster to show the races ad free."