Sainz will join Charles Leclerc - who signed a new long-term deal until the end of 2024 over the winter - to complete Ferrari's youngest driver pairing since 1968 when he arrives from McLaren at the end of the season.
The 25-year-old Carlos Sainz is one of a growing number of second generation motor racing stars to have come to the fore in Formula 1 in their own right, joining the likes of Damon Hill, Jacques Villeneuve, Nico Rosberg, Max Verstappen and Mick Schumacher in seeking to make their own mark in an arena where their fathers had already shone bright in the past.
He excelled in his first season with McLaren a year ago and his strong race performances have earned him the call-up from Ferrari.
"Im pleased to announce that Carlos will join Scuderia Ferrari as from the 2021 championship".
"We discussed with Sebastian and we found out we didn't share the same goals, short or long term goals, Sainz is a great addition, he is smart, young, he has participated in five seasons, he is a strong, reliable pilot that conquers many championship points during races and I believe for us he is a great pilot to be paired with the pure talent of Charles so he can grow and win". I admire Sebastian as a person and as a driver. "He is a real team player, and we wish him well for his future".
But Zak Brown, McLaren's chief executive, said that the Australian's revival brought an "exciting new dimension".
Despite his lack of experience, Norris has shown a cool head under pressure on race day.
"Within the unprecedented context of the 2020 season, discussions held with Daniel Ricciardo concerning a renewal of his contract beyond the end of 2020 have not been successful", the statement read.
Ferrari's announcement of Sainz, who has just one podium finish to his name, will give the Italian team its most inexperienced line-up in recent memory.
A victor of seven F1 races for Red Bull, Ricciardo's best result with Renault was fourth and he had previously admitted he was keeping his options open.
That leaves an open slot over at Renault.