Toyota has announced that it is to pull out of Formula 1 with immediate effect.

The Japanese car company revealed its surprise decision in a news conference in Tokyo today following an earlier board meeting. It said the current economic situation had prompted its departure.

"Toyota Motor Corporation (TMC) announces it plans to withdraw from the FIA Formula 1 world championship at the end of the 2009 season," said a Toyota statement.

"TMC, which had viewed its participation in F1 as contributing to the prosperity of automotive culture, remained dedicated to competing at the pinnacle of motor sports even in the face of the abrupt economic changes that started last year.

"However, when considering TMC's motorsports actitives next year and beyond from a comprehensive mid-term viewpoint reflecting the current severe economic realities, TMC decided to withdraw from F1"

There had been doubts about Toyota's F1 future after the company reported its first ever operating loss in March, and given the departures of fellow manufacturers Honda and BMW. Toyota had also pulled its Fuji track, which hosted the 2007 and 2008 Japanese Grands Prix, from the calendar, and its customer team Williams decided to end its engine deal a year early.

But Toyota signed the new Concorde Agreement, committing it to the world championship through 2012, and team boss John Howett was adamant that the squad would be on the grid in 2010, although there were hints of a reduced budget.

The team had been pressing ahead with 2010 preparations - approaching big name drivers including Kimi Raikkonen and Robert Kubica, and talking of signing impressive stand-in Kamui Kobayashi for next year as recently as last weekend. Current drivers Jarno Trulli and Timo Glock had already been expected to move on.

"TMC also wants to express its heartfelt gratitude to all Panasonic Toyota Racing drivers to date and to all Toyota Motorsport GmbH employees who have helped make the team's achievements possible," said the statement.

"TMC intends to do its best to find a solution for those parties who will be affected by any inconvenience this decision may cause."

Toyota entered F1 in 2002, and was tipped to swiftly become a championship challenger given its huge budget and resources. But it failed to win a race and has just three pole positions, 13 podium finishes, and a best result of fourth in the 2005 constructors' standings to show for its 139 grands prix.

The departure of Toyota is set to throw the former BMW Sauber team a lifeline, as the Hinwil squad and its new owners had been relying on another team dropping out in order to claim the final spot in next season's expanded 26-car entry.

Renault is also holding an extraordinary board meeting to discuss its future plans today. Although the indications are that the French company is committed to F1, Toyota's decision to pull out could give Renault an opportunity to follow suit if it wished.

Toyota added that it would continue to use its F1 experience in "developing exciting production vehicles" and that it would remain involved in motor racing, albeit at a lower level.

"In motorsports, [Toyota] will not only race in various categories, but will also actively contribute to further development of motorsports by supporting grassroots races and planning events in which it is easy for people to participate."