All 10 teams have signed up to the new Concorde Agreement which will govern Formula 1 from 2021 to 2025.

The contract, which sets out the commercial terms of the sport, was first introduced in 1981.

Ferrari, McLaren and Williams announced their support of the revised terms of racing on Tuesday, with the other seven constructors now following suit.

World champions Mercedes had reached an impasse with F1 over the new proposals, but they have now been resolved.

The new deal is designed to end what many consider to be an unfair revenue system, whereby the top teams earn disproportionately more prize money, a system that has created a disparity in competitiveness down the grid and locked in an advantage for Mercedes, Ferrari and Red Bull.

"This year has been unprecedented for the world and we are proud that Formula 1 has come together in recent months to return to racing in a safe way," F1 chairman Chase Carey said in a statement.

"We said earlier in the year that due to the fluid nature of the pandemic, the Concorde Agreement would take additional time to agree and we are pleased that by August we have been able achieve agreement from all 10 teams on the plans for the long-term future of our sport."

Carey added that the new agreement would "create an environment that is both financially fairer and closes the gaps between teams on the race track".

Jean Todt, president of motorsport's governing body the FIA, said the announcement marked "an exciting new chapter" for the sport.

"The conclusion of the new Concorde Agreement between the FIA, Formula 1 and all 10 of the current teams assures a stable future for the FIA Formula 1 World Championship," he added.

Mercedes team boss had previously stated that the German manufacturer would be "the biggest victim in terms of revenue loss" but recent talks with Carey produced a breakthrough on "the clarifications that we wanted to achieve".

Speaking on Tuesday, Ferrari chief executive Louis Camilleri said the new deal was "an important step to ensure the stability and growth of the sport", while McLaren chief executive Zak Brown said it was "the right deal at the right time".

Claire Williams, deputy team principal of Williams, added: "This next era will be characterised by closer and more exciting racing as a result of the new platform of regulations, which include more equitable revenue distribution and a first ever cost cap for our sport."

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