BMW has announced it is pulling out of Formula One at the end of this season.

The German car manufacturer called an emergency press conference at its Munich headquarters to reveal it was ending its involvement in F1.

The landmark decision to restructure BMW Motorsport's activities was made at the Board of Management's meeting yesterday.

Dr Norbert Reithofer, chairman of the Board of Management of BMW AG, said the BMW Group would use resources freed up as a result to develop new drive technologies and projects in the field of sustainability.

He said BMW would continue to be actively involved in other motor sports series.

He said: "Of course, this was a difficult decision for us. But it's a resolute step in view of our company’s strategic realignment."

He said the company did not yet know how many jobs would be lost.

BMW Sauber had hoped to challenge strongly for the championship this year, however, the current car has fallen short of expectations and the team is lying in eighth place in the constructors' championship.

The announcement means BMW is the second major manufacturer to pull out of the sport in the space of eight months following Honda's withdrawal in December.

The news comes ahead of the imminent signing this week of a new Concorde Agreement, the commercial document that governs F1 and binds the teams to the sport for the length of the contract.