Mick Schumacher, the son of seven-time champion Michael, will race in Formula 2 for the first time next season.
The teenager has established himself as one of motorsport's rising stars this year by winning the European F3 title, the first single-seater championship of his career, and his expected promotion to F2 for 2019 means he is now just one step below F1.
"I'm really looking forward to contesting my next season with Prema in FIA Formula 2 - a logical step on my sporting path in my view, because I want to further improve my technical experience and driving skills," said Schumacher, who will test an F2 car in Abu Dhabi this week.
"For me, it was very clear to go into Formula 2 with Prema. I can't thank the Prema family enough for what we achieved together as a team, especially this year, how we continued to develop together."
The 19-year-old has raced with Prema since Formula 4 in 2016. The Italian outfit finished fourth in this year's F2 drivers' standings with Nyck de Vries.
Every Formula 2 race will be shown live on Sky Sports F1 in 2019.
Prema F2 team boss Rene Rosin said the squad were eager to start working with Schumacher, who he described as an "extremely talented and dedicated racer".
"This series is not an easy one due to its learning curve for rookies especially with the introduction of the new car, but we think that Mick has the maturity and skills needed to make it," added Rosin.
"We are excited for the start of the next chapter in his career and we are happy to be part of it."
The top three finishers in this year's F2 championship - George Russell, Lando Norris and Alexander Albon - have all landed F1 race seats for 2019, the first time that has happened in the history of the former GP2 series.