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UPDATE: Official press release from Renault confirming Alonso's return can be read after the jump.

Emerging reports confirm that Fernando Alonso has signed a two-year contract with the Renault F1 Team, with which he won a pair of world titles before defecting to a tumultuous and disappointing year with McLaren.

The contract, according to Spanish newspaper El Mundo, will make Alonso one of the top-paid drivers currently in F1 at a staggering $50 million per season (According to the Wikipedia, Kimi Räikkönen makes $51 million/year). The deal is also reported to include minimal obligations towards Renault's sponsors, an exit clause should Alonso wish to terminate early, and clear, defined #1 status for Alonso over his team-mate.

That role, according to the reports, is set to be taken up by Nelson Piquet, Jr., who will be filling the #2 spot at Renault. The news subsequently leaves current drivers Giancarlo Fisichella and Heikki Kovalainen without confirmed rides for next season, fuelling speculation that Kovalainen could take up Alonso's now-vacant seat at McLaren, especially since news broke of Nico Rosberg's renewal at Williams.

The official announcement from Renault is anticipated shortly, and Alonso is expected to begin testing next year's Renault car at his native Spain's Valencia test track late in January.

[Source: F1-Live.com]

It's widely being reported now that ace F1 driver Fernando Alonso has signed a letter of intent to rejoin Renault, his former team that he left this year to drive for McLaren-Mercedes. That, as we all know, hasn't turned out so well, with Alonso and his fellow teammate Lewis Hamilton constantly talking smack about each other or not talking to each other at all.

The signed letter of intent is reportedly a preamble for a three-year contract lasting from the 2008 season through 2010 and worth over $100 million. The deal hinges, however, on whether or not Alonso can get out of his current contract with McLaren that extends through the 2008 season with an option for 2009. If Alonso and Lewis keep acting like squabbling siblings, then McLaren may be more than happy to unload the champion to restore peace and order.

[Source: F1-Live.com, photo by Clive Mason/Getty]