Mahindra Racing announced its partnership with six-time world champion Max Biaggi to operate a new Moto3 team in the Campionato Italiano Velocita (CIV) championship from 2017 season.
The "ambitious new project" will see the Indian manufacturer support four-time 250cc and two-time World Superbike champion Biaggi in operating a factory team in the Italian CIV series.
The team will also compete in selected races in the FIM CEV Moto3 Junior World Championship, with Biaggi taking up the role of team manager as well as becoming Mahindra's ambassador.
“The Mahindra Group is focused on helping people rise to realise their dreams and that is also Max’s focus with his new role as a team manager and Mahindra Racing ambassador," Mufaddal Choonia, Mahindra's Moto3 boss said.
"Mahindra Racing is pleased to facilitate this new stage in Max’s career by providing the necessary support. Max has had huge success in almost every level of racing and he understands what it takes to win.
"His choice of Mahindra Racing as a partner is a very big vote of confidence for the brand and the MGP3O in particular," he added.
The team will field young Italian riders Alessandro Del Bianco and Davide Baldini for the 2017 season in the championship.
Biaggi commented: “My passion for racing is still very high and I feel the need to give back to the racing community in Italy.
"With this project I am hoping to help young Italians achieve their dreams of racing and winning in the World Championship.
"Mahindra have shown incredible progress in 2016 and it is clear to me that the MGP3O can be a championship-winning machine.
"I approached Mahindra as I know that together we can be fighting for the top. They are offering a great level of support to me, my team and the riders.
"I wish to once again thank them. I am sure 2017 will be a wonderful year for us both," he added.
Ever since Mahindra entered CIV in 2012, the Indian manufacturer has twice won the constructors' championship in 2013 and 2015 seasons, while finished second in 2014 and 2016 respectively.