Toto Wolff has confirmed Esteban Ocon will be Mercedes' reserve and test driver in 2019.
The highly rated 22-year-old, who came through Mercedes' young driver programme, has been unable to find a drive for next season, with his seat at Racing Point Force India expected to be taken by Lance Stroll after the Canadian's father completed a takeover of the team.
Williams had been touted as a potential destination for Ocon, only for Robert Kubica to be confirmed as the partner of rookie George Russell on Thursday.
Speaking at a news conference ahead of the season-ending Abu Dhabi Grand Prix, Mercedes team principal Wolff confirmed Ocon is now set to take on a back-up role with the constructors' champions.
"His plans are pretty clear," said Wolff. "He is going to be pretty close to the Mercedes team – he will be our reserve driver and third driver.
"We hope to do the odd test with him. We are looking at pre-season and in-season but it's not sorted out yet. He will do a lot of time in the simulator to make sure that he is ready."
— Mercedes-AMG F1 (@MercedesAMGF1) November 23, 2018
Wolff had previously been critical of the decisions that led to Ocon being without a seat for 2019.
"What has been going on this year in July and August was just unbelievable," he told Sky.
"There was so much politics in the background, hidden agendas and lies. Not all of the good kids are going to be in cars next year and Esteban will probably be one of them.
"In July he had two offers on the table and it was just a case of choosing which one was the right one. Then he ended up without anything because people simply don't have the balls to stick to what they say.
"But it is no problem, we have to sort it out with Esteban. He is a strong guy, he has been through difficult moments in his career and we will fix this one as well."