World drivers' championship leader Nico Rosberg has agreed a "multi-year contract extension" with Mercedes, the Formula 1 team have officially confirmed.

The 29-year-old German joined Mercedes in 2010 and is currently leading the championship by four points ahead of team-mate Lewis Hamilton.

Following speculation regarding Mercedes' plans to replace Rosberg with Fernando Alonso due to the tempestuous relationship between himself and Hamilton but confirmation sees the 29 year old commit his long-term future to the team ahead of his home German Grand Prix.

"The Mercedes Amg Petronas Formula one team is delighted to announce that it signed a multi-year contract extension with Nico Rosberg on 14 Juliy 2014", the team estates in its official website.

Meanwhile, Rosberg himseld expresses his satisfaction about the agreement.

"I am very proud to drive the Formula One Silver Arrow of the modern era. As a German, the heritage of Mercedes-Benz is very special for me, and I am proud to be able to represent the best car brand around the world. It has been a difficult road to get to where we are now - but everybody kept believing and, thanks to the fantastic support from Mercedes-Benz, we are now leading the way in F1.

"There has been big progress during the past year, building up our structure, management and capability for the future. We have an awesome team and I am confident that we have the right people in place at every level. I'm looking forward to the next years together, when we will keep pushing to win even more races - and, hopefully, championships."

Head of Mercedes sport Toto Wolff believes the agreement will bring stability to the team.

"With his performances in 2014, Nico has demonstrated to the outside world what we knew already in the team: that he is one of the very top drivers in Formula One. This new contract brings us important stability and continuity for the future and I am delighted to be able to make the announcement in time for the home race of Mercedes-Benz and Nico in Hockenheim."