The seven-time world champion preferred not to continue racing elsewhere after stepping away from the sport at the end of 2012.
Schumacher hinted at the time that he was likely to remain in the Mercedes fold.
The manufacturer has now confirmed that Schumacher will work on developing Mercedes' safety and comfort systems for its road cars, as well as joining its road safety projects as he becomes an official ambassador.
"The future interests me much more than the present and past," said Schumacher.
"During my Formula 1 time I always believed that you must not allow yourself to rest on your laurels, but that you must continuously try to improve.
"In so doing I was very often able to rely on the help of all the technologies available to me in the car and use them to my advantage.
"That is why I am a declared supporter of driving assistance systems both in the racing car and in the road-going car."
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