The Stuttgart brand has been a core part of DTM since its relaunch in 2000, and its forthcoming departure will leave the German tin-top series with only two manufacturers, BMW and Audi, from 2019.
Mercedes, which first indicated an interest in joining Formula E last October, joins a growing list of companies to commit to an involvement in the burgeoning all-electric series, including its two DTM rivals.
'Our years in the DTM will always be held high as a major chapter in the motorsport history of Mercedes,' said Mercedes motorsport boss Toto Wolff. 'I want to thank every team member whose fantastic work has helped to make Mercedes-Benz the most successful DTM manufacturer during that time. Although leaving is tough for all of us, we will be doing everything during this season and next to make sure we win as many DTM titles as possible before we go. We owe that to our fans and to ourselves.'
Mercedes first joined the modern DTM's predecessor, the Deutsche Tourenwagen Meisterschaft, in 1988, securing its first title with Klaus Ludwig in 1992.
It took further titles with Ludwig in 1994 and Bernd Schneider in 1995 before the category folded at the end of 1996 amid spiralling costs, but resumed winning ways in 2000 when the series was relaunched in its current guise.
Schneider secured a further four titles in 2000, 2001, 2003 and 2006, while Gary Paffett, Paul di Resta and more recently Sauber Formula 1 driver Pascal Wehrlein have taken a title apiece for the Silver Arrows.
Its works HWA operation currently runs all six of its 2017 entries following a downscaling from eight to six cars last winter, with Paffett and di Resta joined by Lucas Auer, Edoardo Mortara, Maro Engel and Robert Wickens.
Formula E entry deferred by a year
The agreement signed by Mercedes and Formula E Holdings late last year was originally for a season five (2018/19) entry, but instead the German auto giant will make its debut in season six.
Wolff explained this was to 'give us time to properly understand' Formula E and 'prepare for our entry in the right way.'
He also reiterated Mercedes' commitment to F1, which was bolstered by a recent extension to its long-standing title sponsorship agreement with Petronas.
'In motorsport like in every other area, we want to be the benchmark in the premium segment and to explore innovative new projects. The combination of Formula 1 and Formula E delivers that,' he said.
'Formula E is like an exciting start-up venture: it offers a brand new format, combining racing with a strong event character, in order to promote current and future technologies.
'Electrification is happening in the road car world and Formula E offers manufacturers an interesting platform to bring this technology to a new audience – and to do so with a completely new kind of racing, different to any other series.'