Sebastian Vettel will earn about (US) $165,000 for finishing the season with Toro Rosso, according to media sources.
The German newspaper Bild reports that the 20-year-old former test driver, who has been released by his 2007 employer BMW starting this weekend in Hungary, has negotiated a $400,000 per year fee to race with STR in 2008.
"For me this is a dream come true," Vettel said after the news broke on Tuesday.
"It hasn't sunk in yet that I am now a proper race driver in formula one."
He said he was however cautious about expecting too much from his Ferrari-powered single seater, which in the hands of his predecessor Scott Speed, and teammate Vitantonio Liuzzi, has failed to net a single point so far in 2007.
"I am aware that the car is not the best one," Vettel said, "so I can't really say what I will be able to do with it."