Mercedes technical advisor Aldo Costa will join Dallara as chief technical officer at the beginning of 2020.
The former long-standing Ferrari engineer moved to Mercedes in 2011 and was a prime architect of the Silver Arrows squad's dominant success at the outset of the hybrid era in F1.
However, Costa stepped down last year from his active role in Brackley's tech department but retained an advisory duty with Mercedes, for which he will cease to work completely at the end of September.
"After many years working at the pinnacle of our sport, I am excited to be able to contribute some of what I have learned to other racing series and to high-performance automotive projects outside racing," said the Italian.
"I remember writing to Giampaolo [Dallara] at the very beginning of my career for a job - at the time, there was nothing available, but he was able to open some doors for me in the industry.
"Now, many years later, it feels like the wheel has come full circle and I am proud to be joining this iconic company of Italian motorsport."
Mercedes team principal and CEO Toto Wolff said: "Aldo has been one of the pillars of our team since he joined in 2011 and he now leaves us with the same dignity and professionalism that have characterised his years with us.
"He wanted to return to Italy to spend more time with his family and still has much energy and expertise to contribute to the motorsport community.
"His new role with Dallara is a fantastic opportunity and I am delighted he has found such a rewarding role in which to pursue his career - and to contribute his knowledge to almost every level of global motorsport.
"On behalf of everybody at Mercedes, I would like to wish him great success in this next chapter."