Bottas, last year’s runner-up in the drivers’ championship behind stablemate Lewis Hamilton, joined Mercedes in 2017 and has won eight races.
"I'm very happy to stay with Mercedes in 2021 and build on the success we've enjoyed together already,” said the 30-year-old Finn.
“Very happy and very proud!” 💙 #BottasAnnounced pic.twitter.com/i5oy34W991
— Mercedes-AMG F1 (@MercedesAMGF1) August 6, 2020
"The past few years have been all about continuous improvement, working on every aspect of my performance."
"I'm confident that today I'm the strongest I've ever been, but I can always raise the bar," he added.
"Ever since I fell in love with F1 as a kid it's been my dream to one day become world champion."
Bottas, who won the opening race of the reconfigured 2020 season in Austria, heads into this weekend's 70th Anniversary Grand Prix at Silverstone 30 points adrift of Hamilton in the hunt for the drivers' title.
"We're seeing the strongest Valtteri we've ever seen this year - in terms of his on-track performance, but also physically and mentally," Mercedes chief Toto Wolff said.
"I'm confident that we have the strongest driver pairing in F1 today and signing Valtteri is an important first step in retaining this strength for the future."
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