The Volkswagen-owned premium brand said it would reveal by the end of the year which team it would be partnering in what will be the start of a new and more sustainable era for the sport.
Aston Martin and Williams, who both use Mercedes engines, have also expressed an interest in linking up with Audi.
“Formula One is both a global stage for our brand and a highly challenging development laboratory,” said Audi chairman Markus Duesmann in a statement coinciding with a news conference at Spa-Francorchamps.
“The combination of high performance and competition is always a driver of innovation and technology transfer in our industry. With the new rules, now is the right time for us to get involved.”
Formula One will have a new power unit from 2026 with the focus on sustainability and a more cost-efficient future. The Liberty Media-owned sport has set a goal of being carbon-neutral by 2030.
The new rules will also bring greater electrification and the use of advanced sustainable fuel, with power unit manufacturers also subject to a cost cap from next season.
“We have decided to be a full electric car manufacturer and F1 did change the rules in a way that we can enter,” Duesmann, who was previously involved in Formula One with BMW when it owned Sauber, told reporters.
Audi’s powertrain operations will be based in Neuburg an der Donau, near the carmaker’s headquarters at Ingolstadt, with a separate Audi Sport subsidiary being founded for the project.
Adam Baker, a motorsport veteran and former employee of motorsport’s FIA governing body, will be chief executive of the Formula One project.
German rivals Mercedes, who have won the last eight constructors’ titles, build their power unit at Brixworth in central England with a team factory nearby in Brackley.
Porsche, another Volkswagen Group brand, is also expected to enter Formula One in 2026 in partnership with current championship leaders Red Bull.
Audi were 13 times winners of the Le Mans 24 Hours endurance race before quitting in 2017 and the marque has a pedigree dating back to pre-World War Two grand prix racing as Auto Union.
It will continue to compete in the annual Dakar Rally, held in Saudi Arabia, with an electric prototype as well as customer racing with GT cars.
Audi did not put any figure on the costs involved of entering Formula One, or how much had been set aside, but said they did not need to make money with the commitment.
“We will spend as much money as we did spend for the other racing series before, so for us it’s not an additional spend,” said Duesmann, who said the plan was for a very long-term engagement.
“There’s a high likelihood of having an Audi powertrain in an existing car,” he added when pressed about the likely future partner.
“We won’t set up a complete new team. It’s much better if you start with an existing car.”
Duesmann said the plan was to be ‘very competitive’ within the first three years.
By Abhishek Takle