The German wants to "pursue fresh opportunities" within the sport, and was given the green light to agree a multi-year deal by current employers Force India.
"While it's true we will miss Nico ... it would be wrong to stand in his way," team principal Vijay Mallya announced.
"Having spent five years with us, Nico has become a great friend and contributed a huge amount to the team's success. He's an outstanding driver, who has scored more points for this team than anybody else.
"Everybody at Sahara Force India wishes Nico well as he embarks upon a different path in Formula One."
Hulkenberg had courted speculation with an image of Sport Bild's homepage on his personal Twitter account, and expressed his excitement at the prospect of following in the footsteps of compatriot Michael Schumacher -- a driver for the team in 1995.
"Renault has always been a big player in the motorsport world that brings up incredible memories. In his stint with Renault, Michael Schumacher not only helped make Germany an F1 nation; he also sparked my enthusiasm and fire for racing," said Hulkenberg.
"F1's new regulations will change the game and give our team a good opportunity. Renault will play a challenger role, which fits my approach to racing 100%."
Schumacher may have only had one season behind the wheel at Renault, but the F1 great won the second of his seven career titles before a switch to Ferrari.
By contrast, Hulkenberg began his F1 career in 2010 but has yet to finish on the podium -- recording three fourth place finishes in 111 race starts to date.
Foundations in place
It's not yet clear who his teammate will be, but with current Renault drivers Jolyon Palmer and Kevin Magnussen languishing in 16th and 17th respectively, Hulkenberg's move means at least one of them will lose their seat.
"This season has been about putting the foundations in place for future success," Renault Sport racing chairman Jerome Stoll said in a statement.
"For our next step we required an experienced driver who is still hungry for podiums. Nico Hulkenberg fulfils this role perfectly and is an excellent complement to what we want to achieve."
As a new-look Renault team bids to recapture the glory years of Fernando Alonso, who won back-to-back world titles in 2005 and 2006, the Hulk will be hoping he's finally found a team that can help him achieve his dream of winning the F1 drivers' championship.