Ducati have announced that Marco Melandri will ride for their factory team in 2008 and 2009.
Melandri will join Casey Stoner at the team, as the Australian has also signed a deal for the next two years.
The Italian team made the announcement immediately after the US Grand Prix, where Stoner won for the team and Melandri made the podium on his Gresini Honda.
World championship leader Stoner also has an option for 2010 in his new deal, while his current teammate Loris Capirossi could ride a third works machine next year.
Ducati said in a statement: "Next week Loris Capirossi and his manager will meet with Ducati representatives to evaluate the possibility of preparing a third official bike for the Italian rider to use in the 2008 world championship."
Melandri has been critical of Honda this season, as the satellite Gresini team have not received a similar level of support to that of the works squad.