Rosberg joined the German marque from Williams ahead of the 2010 season, partnering first compatriot Michael Schumacher and then Lewis Hamilton, whom he beat to this year’s drivers’ crown after twice finishing runner-up to his long-term friend and rival.
"This is a brave decision by Nico and testament to the strength of his character,” said Toto Wolff, Head of Mercedes-Benz Motorsport.
“He has chosen to leave at the pinnacle of his career, as world champion, having achieved his childhood dream. The clarity of his judgement meant I accepted his decision straight away when he told me.”
Rosberg scored 23 wins, 30 pole positions and 18 fastest laps for the Silver Arrows, and over the last three years his and Lewis Hamilton’s has been the most successful three-season partnership in F1 history.
"It's impossible to capture the essence of a person in a few short words, but Nico has a special combination of natural talent and fighting spirit that have brought him to where he is today,” added Wolff.
“Throughout his career, people have thought he was on a golden path to success just because his father was a world champion; in fact, I think in some ways that made the challenge greater - and meant he had to fight even harder with the weight of expectation on his shoulders.
"With Mercedes, Nico has been a relentless competitor, bouncing back from tough times in an inspirational way, and he earned the respect of the sport with his tenacity, his fighting spirit and his grace under pressure.
“Since 2010, he has poured competitive energy into our team and we have grown stronger because of it. We simply say 'thank you' for the incredible contribution he has made to our success, alongside two of the all-time great drivers, Michael and Lewis.”
Wolff admitted that Rosberg’s decision had taken Mercedes somewhat by surprise, adding that they would not be rushing into confirming a replacement for their 2017 campaign.
"For the team, this is an unexpected situation but also an exciting one. We are going into a new era of technical regulations and there is a free Mercedes cockpit for the seasons ahead. We will take the necessary time to evaluate our options and then find the right path for our future."