US car giant General Motors has reached an agreement in principle to enter Formula 1 in 2026 with its Cadillac brand.

A statement on Monday said that GM and its partner, the US group TWG Global, had committed to name a new team after GM’s luxury Cadillac brand and to build its own engine “at a later time”.

F1 said the application process would “move forward”.

Greg Maffei, president and chief executive officer of F1 commercial rights holder Liberty Media, said: “With Formula 1’s continued growth plans in the US, we have always believed that welcoming an impressive US brand like GM/Cadillac to the grid and GM as a future power unit supplier could bring additional value and interest to the sport.

“We credit the leadership of General Motors and their partners with significant progress in their readiness to enter Formula 1.

“We are excited to move forward with the application process for the GM/Cadillac team to enter the Championship in 2026.”

Mohammed Ben Sulayem, the president of F1’s governing body the FIA, said: “General Motors is a huge global brand and powerhouse in the OEM (original equipment manufacturer) world and is working with impressive partners.

“I am fully supportive of the efforts made by the FIA, Formula 1, GM and the team to maintain dialogue and work towards this outcome of an agreement in principle to progress this application to bring a GM/Cadillac branded team onto the grid for the 2026 FIA Formula One World Championship.

“All parties, including the FIA, will continue to work together to ensure the process progresses smoothly.”

Senior sources in F1 have told BBC Sport that GM and TWG will pay an anti-dilution fee of $450m (£358m) to secure the entry.

This will be split between the existing 10 teams as compensation for their loss of prize money as a result of F1’s income now being split 11 ways rather than 10.

The teams receive between them in the region of 63% of F1’s income.

This is larger than the $200m anti-dilution dictated by the existing F1 rules, but the contracts between the teams, F1 and the FIA end after 2025 and are being renegotiated for 2026. The fee is expected to go up again in the new deals.

The Cadillac team will need to buy a customer engine from an existing supplier to plug the gap before its own engine is finished, which is not expected to be before 2028.

Talks have not been completed, but the favourite at the moment is Ferrari. The Italian team will have a spare supply from 2026 as a result of one of their two current customer teams, Sauber, morphing into Audi’s official entry, for which the German car company is building its own engine.

The new Cadillac entry is a revision of the Andretti bid that was rejected by F1 in January.

F1 said at the time that it did not believe the Andretti project, which was in partnership with Cadillac, would add value to the sport.

This revised bid is viewed differently because it will be GM entering as a team owner.

The new team will be a joint effort between GM and TWG, with Dan Towriss, owner of US team Andretti Global, and TWG’s Mark Walter as the other key investors.

Towriss was at last weekend’s Las Vegas Grand Prix working on the new project.

Michael Andretti, who co-founded the team that bears his name, is no longer involved after stepping down from his role in Andretti Global in September.

The former IndyCar and F1 driver was viewed as a divisive figure who had rubbed people up the wrong way with what was seen to be his confrontational approach to trying to secure an entry.

F1 is facing an investigation from the US department of justice into its decision to reject Andretti’s initial entry.

Michael’s father Mario Andretti, the 1978 Formula 1 world champion, is to be involved in an advisory capacity.

The 84-year-old said in a post on X: “Feel very lucky that I’ve been able to stick around for this long and do what I love for so long.

“And the idea that the Cadillac F1 Team wants me around… I’ll help where I can, a non-executive role with the team, not involved in day-to-day operations (because I don’t want a job), but offering advice, inspiration, friendship anywhere I can. I am beyond fortunate.”