Kimi Raikkonen will remain a Ferrari Formula One driver and partner Sebastian Vettel until the end of the 2016 season.
Raikkonen, the 2007 world champion, re-joined Ferrari at the start of the year but mediocre form had led to rumours the team were exploring other options.
Ferrari president Sergio Marchionne said earlier this year Raikkonen's future lay in his own hands, which was interpreted as a clear signal for the Finn to make improvements amid what has been an indifferent start to his second spell with the Italians.
However Ferrari has released a brief statement which says the "technical and racing agreement" they had with Raikkonen was being renewed.
Vettel, who enjoyed a stunning career with Red Bull, currently sits third in the world championship drivers' standings on 160 points, 42 behind Britain's Lewis Hamilton (202).
Hamilton's Mercedes team-mate Nico Rosberg is second on 181, with Raikkonen down in fifth place on only 76 points.
It means Valtteri Bottas, who had been of interest to Ferrari, is likely to stay with Williams.
The Finn had been one of a number of drivers Ferrari had considered following concerns that Raikkonen's form, particularly in qualifying, had not been good enough.
Red Bull's Daniel Ricciardo and Force India's Nico Hulkenberg were also among the options appraised by the team.
Raikkonen started the season strongly but suffered a dip in form following the first four races of the year. As this followed a 2014 in which he was comprehensively out-performed by Vettel's predecessor Fernando Alonso, it caused disquiet within Ferrari.
But after high-profile errors in the Canadian and Austrian races in June, Raikkonen performed more strongly in the subsequent races in Britain and Hungary before the summer break that comes to an end with this weekend's Belgian Grand Prix.
That was enough for Ferrari to decide that retaining the Finn was their best option and take up the option they had to retain him as they focus on improving the team sufficiently to make a credible title challenge to Mercedes in 2016.
The decision was also influenced by the fact that Ricciardo signed a new four-year contract with Red Bull last winter and that Bottas was under option with Williams.
Trying to sign either driver would have cost Ferrari millions as a result of trying to negotiate a severance deal with their current employers.