Mika Salo will drive for Toyota for the next three years

Toyota has already signed up former Ferrari driver Mika Salo to lead its challenge. The Finn will test next year alongside Briton Allan McNish and race for the company in 2002 and 2003.

Toyota said it would hold a news conference to give more details on the purchase on November 1.

Earlier this month, Toyota said it was in talks with Mitsubishi Estate to buy a stake in Fuji International Speedway Co Ltd, which owns the circuit.

Mitsubishi Estate owns an 80% stake in the racing track firm, while the rest is owned by general contractor Taisei Corp.

Fuji, which staged two F1 Grands Prix in 1976 and 1977, is also located near Toyota's Higashi Fuji technical centre, its core research centre where it develops racing engines.

Media reports said Toyota would spend six billion yen (�38.4m) to buy its stake in the track.

Image boost

Toyota's rival, Honda, Japan's second biggest carmaker, owns two race tracks in Japan Suzuka in western Japan and Twin Ring Motegi in Tochigi, about 50 miles) north of Tokyo.

The Suzuka circuit has been home to Japan's F1 grand prix every year since 1987 and it renewed the contract last May for another five years.

Toyota will enter F1 in the 2002 season for the first time in its history, aiming to improve its image among young people.

Honda returned to F1 in the 2000 season with the British American Racing (BAR) team after leaving F1 at the end of 1992. Next year, it will also supply the Jordan team.