Ott Tanak will be dropped by M-Sport's works World Rally Championship team but is set to immediately pick up a 2016 drive in a DMACK-branded Ford instead, Autosport has learned.
The Estonian is expected to form part of a two-car team with Jari Ketomaa in next year's world championship.
DMACK has long made clear its intention to step up its WRC commitment and will run both drivers in Ford Fiesta RS WRCs. The team is not expected to contest all 14 rallies.
Tanak's demotion, which has not yet been confirmed by DMACK or M-Sport, is the first part of a series of moves that will reshape M-Sport's WRC squad.
Managing director Malcolm Wilson confirmed to Autosport that he expects to be in a position to confirm his drivers in the coming days, with Monte Carlo Rally testing beginning next week.
Since the end of the season, Wilson has been openly critical of Tanak, telling Estonian media: "This has been less than satisfactory from a results point of view.
"Two crashes in the last two rallies for Ott does not put him in a strong position to be included as part of the main team next season."
Wilson's concern has remained Tanak's concentration level.
"It's always important to have a driver relaxed and Ott's had his own trainer with him this season, but there's obviously still work to be done to get the consistency back and to stop making silly mistakes," he said.
"The big thing is the concentration - look at the level of concentration Sebastien Ogier puts in; he's only made one mistake this year.
"To only have one accident when you're driving at the speed he's driving at shows he's absolutely concentrated and there's nothing else in his mind other than driving that car from one end of the stage to another."
M-SPORT CONSIDERED FOLLOWING CITROEN CUTBACK
As M-Sport closes on finalising its 2016 WRC plans, Wilson has admitted the team considered following Citroen into a part-time programme and leaving just Volkswagen and Hyundai as full-time manufacturer teams.
Wilson had always maintained M-Sport would contest the full 2016 season, but he said the calendar expanding to 14 events with China added and Citroen's decision had given him food for thought.
"I can understand Citroen doing what it's done," he said.
"I have told you before the calendar concerns me - it's very, very congested at a time when we need to be working flat-out on the 2017 car.
"At the moment it would be wrong to say we have decided not to enter as a manufacturer. The aim is to be there [on all 14 rounds].
"No firm decision has been taken at this point, but we'd be silly not to look at going down the route Citroen has taken."
The deadline both for manufacturers to sign up for 2016 and for Monte Carlo entries is December 18.