Sebastian Vettel will leave Ferrari at the end of the season after both sides agreed not to renew his contract for the 2021 Formula One season.

The news broke late on Monday night in the German media, with confirmation coming from Ferrari on Tuesday. A statement from the team said it was a joint decision, and Vettel said money was not a defining factor.

As recently as last month, Vettel had said he expected to sign a new contract with the team before racing resumes later this year, but talks appear to have stalled in the meantime.

"This is a decision taken jointly by ourselves and Sebastian, one which both parties feel is for the best," Ferrari team principal Mattia Binotto said. "It was not an easy decision to reach, given Sebastian's worth as a driver and as a person. There was no specific reason that led to this decision, apart from the common and amicable belief that the time had come to go our separate ways in order to reach our respective objectives.

"Sebastian is already part of the Scuderia's history, with his 14 grands prix wins making him the third most successful driver for the team, while he is also the one who has scored the most points with us. In our five years together, he has finished in the top three of the drivers' championship three times, making a significant contribution to the team's constant presence in the top three of the constructors' classification.

"On behalf of everyone at Ferrari, I want to thank Sebastian for his great professionalism and the human qualities he has displayed over these five years, during which we shared so many great moments. We have not yet managed to win a world title together, which would be a fifth for him, but we believe that we can still get a lot out of this unusual 2020 season."

According to the Italian media, Vettel had been offered a one-year deal on a reduced salary, which may also have marked him out as a No. 2 driver to teammate Charles Leclerc, who recently signed a five-year deal with the Italian team.

It's been a huge honor for me to be your team mate. We've had some tense moments on tracks. Some very good ones and some others that didn't end as we both wanted, but there was always respect, even though it wasn't perceive this way from the outside.
1/2 pic.twitter.com/cN0E9t3huw

— Charles Leclerc (@Charles_Leclerc) May 12, 2020

The news leaves Vettel facing an uncertain future as spots at top F1 teams appear unlikely to become available in 2021 unless Lewis Hamilton shocks the sport by leaving Mercedes. Vettel, a four-time world champion, said the recent hiatus in racing because of the coronavirus pandemic had led him to reflect on what really matters to him for the future.

"My relationship with Scuderia Ferrari will finish at the end of 2020," Vettel said. "In order to get the best possible results in this sport, it's vital for all parties to work in perfect harmony. The team and I have realised that there is no longer a common desire to stay together beyond the end of this season. Financial matters have played no part in this joint decision. That's not the way I think when it comes to making certain choices and it never will be.

"What's been happening in these past few months has led many of us to reflect on what are our real priorities in life. One needs to use one's imagination and to adopt a new approach to a situation that has changed. I myself will take the time I need to reflect on what really matters when it comes to my future.

"Scuderia Ferrari occupies a special place in Formula One and I hope it gets all the success it deserves. Finally, I want to thank the whole Ferrari family and above all its 'tifosi' all around the world, for the support they have given me over the years. My immediate goal is to finish my long stint with Ferrari, in the hope of sharing some more beautiful moments together, to add to all those we have enjoyed so far."

The news will bring an end to Vettel's six-year career at Ferrari at the end of this season, which is expected to start on July 5 in Austria. Vettel has won 14 races for the team but failed to add to the four titles he won with Red Bull between 2010 and 2013. He had initially joined Ferrari with the aim of emulating his childhood hero, Michael Schumacher, who won five titles in red in the early 2000s.

Ferrari has not yet announced a replacement for Vettel, but McLaren's Carlos Sainz and Renault's Daniel Ricciardo are out of contract at the end of the year and obvious candidates to partner Leclerc, who will remain at the team until 2024.

Hamilton was linked to Ferrari at the end of last year after meeting the company's chairman, John Elkann, at a social event, but has since suggested he will remain at Mercedes.