Both Williams and Mercedes have expressed their delight in extending their partnership beyond the 2025 campaign.
The announcement was made on Monday afternoon and will see the collaboration run until at least the 2030 season.
Mercedes has supplied Williams with Power Units ever since the turbo-hybrid era started in 2014.
Williams was relatively successful in the opening years of the new Power Unit regulations and scored several podiums, finishing third in the 2014 and 2015 seasons.
James Vowles, Team Principal at Williams, stated: "We have enjoyed a long-term partnership with Mercedes-Benz, and we are thrilled to extend this collaboration into the next era of Formula 1.
“The expertise, support and technology that Mercedes brings to the table align perfectly with our team's aspirations in the medium and long term.
“This long-term agreement with Mercedes is a positive step and forms part of our objectives for the future, whilst we will still retain our design and manufacturing expertise and capabilities in-house."
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New Power Unit regulations will come into play in 2026, with Mercedes currently scheduled to supply its own works squad as well as Williams.
“We are delighted to confirm Williams Racing as the second customer team that we will supply for the 2026 power unit regulations,” said Mercedes Team Principal Toto Wolff.
“Today’s news highlights the strength of the Mercedes-Benz offering in F1 and importantly not only validates, but reinforces, our overall motorsport strategy.
“Since 2014, we have continued to build and develop our relationship with Williams.
“As the team continues to put the foundations in place to challenge at the front of the grid, we look forward to supporting them with our power unit supply.”