The four-time world champion has been linked with the outfit currently known as Racing Point since Ferrari revealed in May that he would not be retained after the end of this year.
Aston Martin owner Lawrence Stroll targeted the German, who will clearly bring extra attention to the team from the very start under its new manufacturer-backed identity.
With Lance Stroll staying on that meant there was no seat for Sergio Perez, who is currently in his seventh season with the Silverstone team. On Wednesday evening the Mexican confirmed his departure by issuing a press release.
The signing of Vettel is another indication of how serious Stroll is about building up the Aston Martin team. A new factory, adjacent to the current facility, is in the planning stages.
"I am pleased to finally share this exciting news about my future,” said Vettel. “I’m extremely proud to say that I will become an Aston Martin driver in 2021.
"It’s a new adventure for me with a truly legendary car company. I have been impressed with the results the team has achieved this year and I believe the future looks even brighter.
“The energy and commitment of Lawrence to the sport is inspiring and I believe we can build something very special together. I still have so much love for Formula 1 and my only motivation is to race at the front of the grid. To do so with Aston Martin will be a huge privilege.”
Team boss Otmar Szafnauer said: “Everybody at Silverstone is hugely excited by this news. Sebastian is a proven champion and brings a winning mentality that matches our own ambitions for the future as Aston Martin F1 Team.
“On a Saturday or Sunday afternoon, Sebastian is one of the best in the world, and I can’t think of a better driver to help take us into this new era. He will play a significant role in taking this team to the next level.”