The German car giant has taken a 75% stake in the Formula One world champion team
The Brawn team will be rebranded Mercedes GP, says chairman of parent company Daimler AG and head of Mercedes-Benz, Dieter Zetsche.
Team principal Ross Brawn, who took over the British-based organisation after former owners Honda quit the sport at the end of 2008, will remain in his role.
However, the future looks less certain the the Brawn drivers, including Jenson Button. The new outfit are expected to opt for countryman Nico Rosberg as their number one driver with Nick Heidfeld his likely partner.
Mercedes Sports boss Norbert Haug revealed he was attempting to secure Heidfeld, who has driven for BMW since 2006.
"Mercedes-Benz supports the idea of signing an experienced and capable German driver. There is however no reason to finalise the driver situation too hastily."
This year's drivers champion Button, visited McLaren's headquarters last week and is tipped to sign for the British team to drive with 2008 champion Lewis Hamilton next year.
Mercedes, whose engines powered Button to the 2009 title, will continue to supply McLaren for the next six seasons.
The purchase of the Brawn team was funded by Mercedes' parent company, Daimler AG, and the Abu Dhabi investment fund Aabar, Daimler's largest shareholder.
As part of Monday's deal Daimler AG has given up its 40% stake in McLaren but Mercedes will continue to supply engines to the team for the next six seasons.