The BMW-Sauber team has been struggling this season and is currently in eighth position in the constructors’ championship although the car maker insists it is the environment and not performance behind its decision.
Norbert Reithofer, chief executive of BMW, says: “We are of the opinion that the premium segment has to remain a positive role model within our society.”
BMW has been pushing its green credentials for the past two years, launching the “EfficientDynamics” concept, which aims to reduce “fuel consumption and emission levels without affecting driving pleasure”, in 2007.
The car maker follows Honda, which announced it was pulling out of the sport in December due to financial pressures and has since been reborn as Brawn GP.
The sport is under intense financial pressure at the moment as sponsors and manufacturers reduce investment amid the global economic downturn.
Last month, F1 was plunged into crisis after eight teams threatened to create a breakaway championship because of FIA plans to impose a voluntary budget cap.
The crisis appears to have now been averted after Max Mosely, president of the FIA, agreed to step down and the plans for a cap were scrapped.