The German marque, which has been the dominant forces in F1 -- winning constructors' championships in 2014, 2015 and 2016 -- will conclude its participation in the Deutsche Tourenwagen Masters series at the end of 2018 in what it calls "a strategic repositioning of its motorsport activities."
Brazilian Formula One driver Felipe Massa was moved to tweet: "Critical moment for @DTM !! And @FIAformulaE growing a lot ..."
The Formula E series now has 10 confirmed powertrain manufacturers for season six -- more than triple CEO Alejandro Agag's initial target.
"This shows how much the world is changing, not only in motorsport, but the whole automotive industry," said Agag.
"We're witnessing a transformation that will first change our cities, and then our roads.
"Formula E is the championship that embodies that change, and together will all our teams and manufacturers, we'll keep pushing for technologies to have better and more affordable electric cars."
'Quite a statement'
Mercedes follows the likes of Renault, Jaguar
in making the transition to all-electric racing.
Though the company had initially been offered a chance to hit the grid in 2018/19, Mercedes officials stressed the importance of "properly understanding" Formula E.
"In motorsport, like in every other area, we want to be the benchmark in the premium segment and to explore innovative new projects," said team boss Toto Wolff.
"With Formula 1 and Formula, we have achieved exactly this balance."
A number of F1 pundits remarked that Mercedes' decision was very much a sign of the times, with TV presenter Jennie Gow
labeling it a "quite a statement."
who presents CNN's Supercharged series, tweeted: "Incredible news."
Meanwhile Audi Sport said it welcomed Mercedes-Benz's entry into Formula E, adding that it "further emphasizes the importance of electric racing."