Seven-time World Champion Michael Schumacher is set to leave Mercedes Benz GP at the end of the 2012 following the decision of the team not to extend his contract.

As announced by the team last Friday, Schumacher will be replaced next season by Britain’s Lewis Hamilton, who opted to switch teams from the McLaren group.

It is still unclear what Schumacher will do after the 2012 season although there are rumors of a move either to Sauber or back to Ferrari.

The 43 year old driver returned to Formula 1 in 2010 after a three-year hiatus.

His return however was lackluster as Mercedes GP has failed to provide him with a competitive car.

During his return, Schumacher has only managed to score one pole position and one podium finish.

Dieter Zetsche, the Mercedes Benz chief said Schumacher’s age was not to blame for his dreary performance and surmised that Mercedes was not able to provide him with a competitive car during the past three years.

Schumacher won his last World Title back in 2004 with Ferrari.  Last season, he finished eighth in the Driver’s Standings.