(CNN) -- Former world champion Jacques Villeneuve took a step closer to a dramatic Formula One comeback after confirming Wednesday that he has joined forces with Italian motorsport team Durango.
Durango owner Ivone Pinton told the 422race.com website last week that the team had struck a deal with the 39-year-old to be its driver in the hope of becoming the 13th team on the starting grid next season
Villeneuve, who won the F1 title in 1997 with Williams, last competed in motorsport's elite championship in 2006.
The Canadian released a statement on his official website confirming the link-up between his team Villeneuve Racing and Durango, founded in 1980 and which competes in the European AutoGP series.
He also denied reports that the son of controversial Libyan leader Muammar Gaddafi is an investor in his new team.
"There are a number of rumors circulating at the moment and I wanted to clarify a few things before this gets out of hand," Villeneuve said on www.jv-world.com.
"The team will be a joint venture with Durango, and based out of Italy.
"To be clear, right now all the money comes from corporate sponsorship, and not from personal investors."
Villeneuve quit BMW Sauber in 2006 before moving into the U.S. NASCAR motorsport series. He will line up in qualifying for the Brickyard 400 at Indianapolis this weekend
Villenueve was close to signing for Stefan GP in 2009, but the deal fell through after the Serbian team's bid to join the F1 circuit this year failed.
F1's governing body, the International Automobile Federation, is expected to decide later this month who will be the 13th team for 2011.
Should Durango and Villeneuve Racing's joint application prove successful, he will be the second high-profile driver to make a return to the sport in recent years.
Seven-time world champion Michael Schumacher, 41, joined Mercedes GP this season after a three-year hiatus, but is yet to achieve a podium finish on his comeback.