Manor have terminated Rio Haryanto's contract halfway through the 2016 season and replaced the Indonesian with Esteban Ocon.
Haryanto, an F1 rookie this year, was heavily backed upon his arrival in the sport but has struggled to raise funds in recent months, with Manor confirming the Indonesian has been dropped after he was "unable to meet his contractual obligations".
Stoffel Vandoorne, Alexander Rossi and Jordan King were all linked with the race seat but it is Ocon who will line up alongside fellow Mercedes youngster Pascal Wehrlein in the MRT05 for the rest of the campaign.
Haryanto, whose best finish from his 12 grand prixs was 15th in Monaco, has instead been offered the team's reserve seat.
"Some time ago, his management indicated that they were experiencing difficulties honouring the obligations of that contract beyond the Hungarian Grand Prix," Manor race director Dave Ryan said.
"Rio's team have worked tirelessly to try to resolve that situation with his Indonesian backers and we have supported those efforts as much as possible, including allowing Rio to race in Germany. Unfortunately we reached a point where, in the best interests of the team, we were forced to explore other options for the remainder of the season."
Ocon's first race will come at the Belgian GP later this month, and the Frenchman confirmed that he has already had his seat fitting at Manor and wants to hit the ground running.
"I'm ready for this exciting step up," he said. "I'd like to thank Renault Sport F1 Team and Mercedes-Benz for working together to make this happen, and to Manor Racing for the opportunity, which I'm going to grab with both hands.
"They've done a great job this season and I'm excited that I've been tasked with helping them to build on that progress. I can't wait to get started!"
The European F3 and GP3 champion has been combining his Mercedes DTM exploits with his role as Renault's reserve driver and has been tipped to secure a full-time F1 seat with the team next year with both Jolyon Palmer and Kevin Magnussen vulnerable.
"Esteban will be up against a highly rated and quick team-mate, which will enable us to evaluate him in a representative environment," Renault boss Cyril Abiteboul said.
His new partnership with Wehrlein, who scored Manor's only point of the season in Austria, also allows Mercedes to observe their two rising stars up against each other.
"Esteban did an exceptional job in the works Mercedes at the Silverstone test and we are excited to see him take his first steps in an F1 race environment," team principal Toto Wolff added.