Seven-time world champion Michael Schumacher has confirmed he will retire for the second time at the end of 2012.

“I have decided to retire at the end of the season,” the German driver told a press conference.

“I still feel I am capable of competing against the best but the time sometimes comes to say goodbye and this time it might be forever.”

The 43-year-old’s place at Mercedes will be taken by McLaren’s Lewis Hamilton in 2013.

Schumacher returned to the sport in 2010 on a three-year contract after a three-year break from the sport from 2007 to 2009.