After a disastrous and costly return to the sport, it is being reported that Honda has agreed to release McLaren from their contractual obligations for 2018. This paves the way for McLaren to obtain a Renault engine supply. It also appears that the Sainz to Renault and Honda to Toro Rosso will go through.
Honda's return to F1 with McLaren has been a disastrous affair, since the Japanese manufacturer came back to the grid in 2015. The key issue has been a lack of performance and consistent reliability problems resulting in a frustrating affair for both parties.
After making progress during the 2016 season, after a horrible 2015 season it appeared going into 2017 that the McLaren Honda package would be more competitive. Unfortunately, this has not been the case with both Alonso and Vandoorne dealing with unreliable and uncompetitive engines.
The relationship has become so fractious during the 2017 season, it became clear a split was likely, with Renault emerging as McLaren's only realistic alternative.
The McLaren-Renault appears to help McLaren retaining the services of Fernando Alonso for another year.