Kris Meeke will keep his Citroen WRC seat and lead the team for the next round of the championship in Spain next month.
Meeke's teammates in Catalunya will be Stephane Lefebvre and Khalid Al-Qassimi, leaving no space for Craig Breen.
Andreas Mikkelsen, who has contested three of the last four rallies for Citroen, has moved across to join Hyundai for the rest of the season.
Despite Meeke having a full-season contract with Citroen, his place in the team had been questioned after he struggled for form on Rally Finland and then crashed on a Thursday night superspecial stage in Germany last month.
Citroen team principal Yves Matton is looking for Meeke to put his difficult run behind him and recapture the speed that took him to a win in Mexico earlier this year.
"As a mixed surface event, Rally Spain matches the qualities of the C3 WRC pretty closely and we hope we can be among the frontrunners again," said Matton.
"Quick on both gravel and Tarmac, Kris Meeke will hopefully be able to build on the confidence he acquired during the second leg in Germany and aim to secure a positive result."
While Breen misses out in Spain, he will be back in the factory Citroen for the last two rallies in Britain and Australia.
"Obviously, Craig Breen's fans will be disappointed that he is not competing in Spain, but I have to contend with budget restrictions that mean we can't enter any more cars," Matton added.
"At the start of the season, Craig's programme was planned over 11 rallies and we considered, in consultation with Craig, that it was preferable for him to be competing in Wales and Australia instead."
Meeke's Citroen deal was supposed to cover every event of both the 2017 and '18 WRC seasons, but Matton will now leave firm decisions on team line-ups as late as he can for the rest of this year.
But the entry deadlines for Wales and Australia mean Citroen will have to select its drivers for those rounds before the preceding event has taken place.
"This is something we need to work with the FIA on," Matton told Motorsport.com. "Nominating the drivers before the previous rally is finished is not really ideal and I don't understand why it has to be like this."
Meeke's confidence for Spain will be boosted by having found a set-up that suited him for the leg-one gravel stages during last season's event.