Haas team boss Gunther Steiner hinted on Thursday ahead of this weekend’s Russian Grand Prix that a decision was due shortly.
The team has now confirmed it will field Magnussen and Grosjean for a third consecutive season.
“From the very beginning, we needed experienced drivers to hasten the development of our car and our team, and we have two very good and experienced drivers in Romain Grosjean and Kevin Magnussen,” said Steiner.
“We’ve improved drastically from last year to this year, so retaining both drivers was a pretty easy decision.”
Magnussen has been Haas’s lead driver this season and the Dane is ninth in the championship with 49 points.
“I’ve never been in a better situation than the one I’m in here at Haas F1 Team,” Magnussen said.
“This is a team filled with racers and we’re all striving for the same thing.
“There’s no bureaucracy and everything is very straightforward.
“[Team owner] Gene Haas is all about efficiency, and he and Gunther Steiner have created a very efficient environment that gets the best from its people.
“We all believe in each other and that’s why we’ve achieved as much as we have.”
While Magnussen’s impressive second season with the US team made his continuation a formality, Grosjean was under pressure following a string of high-profile errors early in the year.
He recovered from that by scoring Haas’s best F1 result with fourth in Austria and has since banked three more points finishes to help the team fight Renault for fourth in the constructors’ championship.
Grosjean will continue with the team for a fourth season, having joined for its debut campaign in 2016.
“It’s impressive to see what this team has accomplished in such a relatively short time, and for someone who has been here since the very beginning, I take a lot of pride in the time, effort and sacrifice we’ve all put forth to make Haas F1 Team so competitive,” Grosjean said.
“I’m very happy to continue with Haas F1 Team and represent Haas Automation and all of our partners.
“Gene Haas has built something very special – something we can make even better – and it’s an honor to be a part of it.”