The move ends Russell's three-year 'apprenticeship' with Williams as he now steps up to partner seven-time champion Lewis Hamilton.
Confident of future success for Russell, Capito said: “Over the past three years, it’s been clear to every member of staff here at Williams just how dedicated, focused, and talented George is through his contributions to the team both on and off track.
"He has all the characteristics necessary to achieve the greatest success in our sport and we are therefore delighted for him, both as a team and me personally, to see him rewarded with the opportunity to test himself at Mercedes.
"We will watch his progress with interest and pride, knowing the role Williams has played in developing his considerable skills."
In the driver merry-go-round, sparked by Bottas' departure, Williams now has its own vacancy to fill, with Red Bull reserve driver Alex Albon and Mercedes' Formula E champion Nyck de Vries in the frame.
Previously indicating his team is in no rush, Capito added: "We were, of course, aware of this possibility coming to fruition and therefore have a number of strong driver options available to us.
"We now look forward to shaping our future line-up that will help us take the next step in our exciting journey as a team and will make any announcement in due course.”
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