Mercedes' Nico Rosberg signs a new two-year deal, extending his stay to 2018

Budapest: Championship leader Nico Rosberg on Friday signed a new two year deal with Mercedes, the contract extending his fractious relationship with teammate Lewis Hamilton until 2018.

The Formula One world champions posted a video of Rosberg and Mercedes team boss Toto Wolff signing the new contract with the caption "It is done..." on their official Twitter page.

In it, Rosberg clenched his fist and gave a thumbs-up sign.

Another post, a photograph of the contract, was accompanied by the message: "signed, sealed, delivered".

Rosberg leads defending three-time champion Hamilton, who is also under contract with Mercedes until 2018, by one point ahead of Sunday`s Hungarian Grand Prix.

Rosberg and Mercedes had been in discussions about a new contract for several months and the driver had recruited former Formula One driver Austrian Gerhard Berger to represent him, allowing him to concentrate on his own racing.

"Nico has been a core member of the Silver Arrows since the team returned to the sport in 2010 and has played a crucial role in the team`s success in that time," said a team statement.

Rosberg has won 19 races with the team since he joined in 2010.

Mercedes` confirmation of Rosberg signals that all three leading teams, including Ferrari and Red Bull, have retained their drivers for next year.