Formula One supremo Bernie Ecclestone confirmed on Friday that he has closed a deal for the Spanish city of Valencia to hold a Grand Prix on a brand new urban circuit next year.
"The agreement was signed this morning along exactly the same lines as we announced last month," Ecclestone told Reuters. "The agreement is for seven years."
The deal was signed with the Valmor Sport group, an organisation which has been set up by former motorcycle Grand Prix rider Jorge Martinez Aspar and local businessman Fernando Roig, who is also president of football club Villarreal.
The original announcement caused a political storm in Spain because Ecclestone appeared to link the deal to the victory of the conservative presidential candidate Francisco Camps in regional elections.
Ecclestone subsequently denied that he had made any such link.
"I said I wouldn't formalise a contract until after the elections because I didn't know who I would be signing it with," he said.
Camps was re-elected as president of the Valencian regional government last month.
The race, to be called the European Grand Prix, is scheduled for late in the season on a newly designed circuit based around the city's America's Cup port.
The inclusion of the Valencia race will give Spain two Grands Prix next year. Barcelona's Circuit de Catalunya has a contract to hold the Spanish Grand Prix until 2016.
Valencia's willingness to pay an estimated 26 million euros ($34.94 million) to stage each race, and the boom in popularity of Formula One in Spain since the emergence of double world champion Fernando Alonso, are seen as major factors behind the decision.