Explaining the reasoning behind the decision, with Perez signing a one-year deal, team principal Christian Horner said: "Alex is a valued member of the team and we thought long and hard about this decision.
"Having taken our time to evaluate all the relevant data and performances we have decided that Sergio is the right driver to partner Max for 2021 and look forward to welcoming him to Red Bull Racing.
"Alex remains an important part of our team as test and reserve driver with a key focus on 2022 development and we would like to thank him for his hard work and contribution.”
Red Bull's decision comes in the wake of a stunning campaign for Perez, with the Mexican finishing fourth in the drivers' standings and scoring points in 13 of the 15 races in which he competed, including a memorable debut win in the recent Sakhir Grand Prix.
The 30-year-old's form soared after returning from a two-race lay-off after contracting Covid-19, and after former team Racing Point took the decision to dispense with his services in favour of four-time champion Sebastian Vettel.
Perez is only the second driver after Mark Webber in 2008 from Williams to sign for Red Bull after not being promoted through the team's young driver programme.
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