Lewis Hamilton is set to move from McLaren to the Mercedes Formula One team next season in a deal likely to send Michael Schumacher back into retirement, according to media reports in Britain and Germany.

x-defaultBritish newspapers said an announcement could come later on Friday once the Mercedes board had signed a new commercial agreement committing the German car maker to the sport’s long-term future.

Bild, Germany’s best-selling tabloid, said on its website (www.bild.de) that Mercedes had opted for 2008 world champion Hamilton.

There was no immediate comment from either Mercedes or the Briton.

Hamilton’s contract negotiations have been a running saga all season with reports that he was close to a deal with Mercedes emerging early in September.

More recent indications were, however, that the 27-year-old was in favour of staying with McLaren, the team that had nurtured him since he was in his early teens and that handed him his Formula One debut in 2007.

The Daily Telegraph said championship contenders McLaren were understood to have been informed of the driver’s decision only on Thursday.

The Daily Mail added that Hamilton would be accepting a three-year contract, including win bonuses, worth 60 million pounds ($97.15 million) with a basic annual salary of around 15 million.

Mercedes had made no secret of their desire to sign Hamilton in place of seven times champion Schumacher, the sport’s most successful driver, whose return to the sport after retiring from Ferrari in 2006 has been unremarkable.

Schumacher has been on the podium just once since he began his comeback in 2010 and has retired from half of the 14 races this season.

Mercedes took over champions Brawn GP at the end of 2009 but have had only one victory – Nico Rosberg’s success in this year’s Chinese Grand Prix – to celebrate.

While that was the first by a works Mercedes since 1955, McLaren are regular challengers for the title and have won five times this year – three of them provided by Hamilton.

On paper, Hamilton would be swapping a place with proven winners for a British-based team with little success but plenty of potential. Mercedes also make the engines used by McLaren and have a substantial development budget.

Mercedes team principal Ross Brawn has a highly impressive track record after multiple championships as technical director at Benetton and Ferrari and boss of the Brawn team he saved after previous owners Honda pulled out in late 2008.

A move to Mercedes would reunite Hamilton, whose management company XIX Entertainment also look after the business affairs of former England captain David Beckham and tennis player Andy Murray, with former karting team mate and friend Rosberg.

Info: AsiaOne, Image: McLaren

Find us on Facebook and Twitter for all the latest updates for the F1 2012 season