"It has been a really tough decision not to work together at this level but I knew that one day it had to come," said the 37-year-old Schumacher.

"All these years in Formula 1 have been amazing, especially those spent alongside my friends in the Scuderia (Ferrari)," he added.

The German's announcement came only minutes after securing his 90th career Grand Prix win this afternoon at Monza, Italy.

"Soon my future will belong to my family, while I am happy to be still part of Ferrari. But for now, what matters is this world championship," said the seven-time world champion.

"Now I just want to concentrate on the last three wins and finish the season in style, hopefully with the championship. We took a big step today."

Schumacher finished the race ahead of his successor at Ferrari, Kimi Raikkonen of McLaren Mercedes, who came in second place.

After Schumi's announcement, Ferrari confirmed Raikkonen as a new signing and that Brazilian Felipe Massa has extended his contract with the team.

"Ferrari announces that the agreement with the driver Felipe Massa has been extended until the end of the 2008 season," a read a statement released by the Italian team.

"Ferrari also announces that it has reached an agreement with the driver Kimi Raikkonen to cover the 2007, 2008 and 2009 racing seasons," the statement continued.

Schumacher, who closed the gap with championship leader Fernando Alonso to two points, said he was glad the Finnish ace would be his replacement.

"I was really pleased to hear that he would be the person," he said.