The team, which will be rebranded, announced the move Thursday, a day after driver Sergio Perez announced he was on his way out.
“The signing of Sebastian is a clear statement of the team’s ambition to establish itself as one of the most competitive names in the sport," the team said in a statement. “As a four-time world champion, Sebastian brings a fresh mindset to the team. He is one of the most accomplished and respected drivers in world motorsport and knows what it takes to win at the highest level."
Vettel is leaving Ferrari at the end of this season. He will be replaced by McLaren’s Carlos Sainz at Ferrari next year.
Racing Point’s other driver is Lance Stroll, the son of co-owner Lawrence Stroll.