The Spaniard, who won the championship title in 2010, 2012 and 2015, will race for Ducati, the current stable of Andrea Dovizioso and Andrea Iannone, for two years from 2017.
A Yamaha statement on Monday read: “After three incredible titles, 41 race wins and 99 podiums together, Jorge Lorenzo and Yamaha will part ways after the 2016 season.
“Yamaha is extremely grateful for Jorge’s contributions to its racing successes and looks forward to sharing more memorable moments during the remaining 15 rounds of 2016.”
Ducati soon followed their rivals’ lead by revealing they had secured the services of Mallorca-born Lorenzo, who trails Repsol Honda’s Marc Marquez by 21 points in the current MotoGP standings.
Yamaha have already reconfirmed Italian great Valentino Rossi for 2017-18 and will announce their second rider “in due course”.