Launching in March 2012, the Sky Sports F1 channel will provide in-depth coverage of the world's premium motorsport to satellite TV customers in standard and high definition.
The "new home" of F1 will show every race from the season live from March to November between 2012 and 2018, broadcasting coverage uninterrupted by adverts.
The channel will also cover all live practice and qualifying sessions, along with F1 programming, including interviews, archive action and magazine shows.
Sky will also harness its interactive services to enable fans to follow the action through in-car cameras, as well as track race data and go behind the scenes with teams in the pits.
Sky Sports F1 will be made available at no extra cost to all Sky TV customers signed up to both Sky Sports 1 and 2, or the HD pack of channels. It will be available at channel 408 on Sky's EPG.
It is understood that Sky is in talks with other providers about making the channel available, with pay-TV rival Virgin Media most likely to agree a carriage deal.
BT Vision and Top Up TV, which both already provide Sky Sports 1 and 2, would need to purchase another Freeview channel slot to be able to offer Sky Sports F1, which makes carriage unlikely due to the high cost.
The expected lack of Freeview availability for F1 will further compound irritation among fans upset at the joint deal agreed between the BBC and Sky earlier in the year, which will see the corporation's free-to-air F1 coverage cut in half from next season through to 2018.
The BBC will air all the "key races" each season, including the Monaco and British Grands Prix, as well as carry highlights of any races that it does not show in full.
"Formula One followers are hungry for more and we want to give them the ultimate experience. It's not just every minute of every race but a channel devoted to Formula One," said Sky Sports managing director Barney Francis.
"We can now tell the whole story of the season, from every Grand Prix, from start to finish. Formula One will get the full Sky Sports treatment. We have big plans for live shows and a rich lineup of Formula One programmes; getting to the drivers, exploring the technology and lapping up the drama."
Sky chief executive Jeremy Darroch added: "This brand new channel again proves Sky's commitment to investing in the best content for customers. It will give even more value to Sky customers and create another reason for others to consider pay-TV.
"This is another example of the value we are creating for customers through our content leadership. It follows the recent launch of other high-quality new channels like Sky Atlantic and Sky 3D as well as our growing commitment to UK original content in areas such as drama, comedy and the arts."
As well as following the action on Sky Sports F1, Sky will also make the Formula One coverage available online, and on mobile devices via its Sky Go multi-platform service.
Speculation is rife that BBC lead commentator Martin Brundle has agreed a deal to become part of Sky's new presentation team for Formula One coverage.