Luxury watch brand Tag Heuer has extended its agreement with the McLaren Formula One team, taking the partnership into its 25th year.

The news was announced after the brand celebrated its 150th anniversary with a special function at the McLaren headquarters in the UK on Thursday. Tag first partnered with McLaren in 1985, making it one of the longest associations in sport.

Martin Whitmarsh, McLaren's team principal, explained that team and brand "share a passion for technology" and called it a "natural relationship". He added: "To announce the extension of a partnership that has already prospered for 25 years not only says a lot about the very close relationship that exists between Tag Heuer and Vodafone McLaren Mercedes, but it also speaks volumes about the appeal, strength and sustainability offered to all partners by Formula One."

Tag Heuer's president and chief executive Jean-Christophe Babin said: "It's a matter of considerable pride to all of us at TAG Heuer that we can not only look back on a fantastically successful 25-year relationship, but that we can continue to share our vision together long into the future.

"In many ways, Tag Heuer has become synonymous with Formula One and, in particular, the Vodafone McLaren Mercedes team. Many of our ambassadors – Ayrton Senna, Mika Hakkinen and Lewis Hamilton – have become some of Formula One's greatest champions, and our timepieces will long continue to celebrate the accuracy, the precision and even the history of this great sport."

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As part of the deal Lewis Hamilton is expected to continue as one of Tag Heuer's major brand ambassadors, with his new team-mate Jenson Button also thought likely to be part of the company's advertising and marketing campaigns.

No financial details were released, in traditional Formula One style, but the agreement is believed to be along the same lines as the previous deal with the team with a total annual value of around US$2 million.