Loeb will race a Peugeot 208 WRX for the Peugeot-Hansen squad alongside Swede Timmy Hansen, who finished second in the World RX championship in 2015 to winner Petter Solberg.

“I’m very excited by this opportunity to participate in the full World Rallycross Championship for the first time,” said Loeb.

“Over the years I have been fortunate to participate in some truly amazing racing, but rallycross - with the sheer power and the competiveness of the Peugeot 208 WRX, plus the intense nature of the competition - will be something very special.

"The car and the strategy for this type of racing is completely new to me, so I have a lot to learn, but I hope I can be competitive pretty soon.”

The Frenchman has twice competed in rallycross before. He won the rallycross final at X Games 2012 driving a Citroen DS3 built by Hansen Motorsport for Citroen Racing.

I have a lot to learn, but I hope I can be competitive pretty soon. Sebastien Loeb

He also raced at his home round of the European Rallycross Championship in 2013, where he finished fourth in the first semi-final.

Loeb split with Citroen Racing at the close of 2015, ending his programme in the World Touring Car Championship, in which he has raced in the last two years, both times finishing third overall and winning races in the process.

In January 2016, Loeb made his debut on the Dakar rally with Peugeot Sport in South America. The Frenchman led until the halfway stage, but ran into problems and finished ninth.

Peugeot-Hansen scored five World RX victories in 2015 and won the teams championship with one event to spare. Team principle Kenneth Hansen believes the team can be even stronger this year.

“Last season we proved that we had the potential to perform in the series with Timmy Hansen and Davy Jeanney,” said Hansen.

“By adding Sebastien Loeb to the equation, we will be even stronger. Rallycross is one of the hardest disciplines to dominate, with no room for mistakes. Sebastien has incredible capacity to adapt and I have no doubt that he will be a strong challenger.”

To work with [Loeb] now is like a dream come true for me. Loeb's new teammate Timmy Hansen

Former single-seater racer Timmy Hansen moved to rallycross in 2013. He won his third event as a full-time driver in Hungary in a Citroen DS3, and won with the Peugeot 208 for the first time in Italy in 2014.

Hansen says working with Loeb will be a dream come true: “I’ve looked up to Sebastien my entire life: I even met him once to get his autograph. So to work with him now is like a dream come true for me.

"I have a lot to learn still, so to get advice from him will be amazing. And I’m sure he’ll also have a lot of specific things to learn from me in rallycross. That’s how I hope we can bring the team forward together: pushing new limits and helping each other grow.”

2015 driver Davy Jeanney will also be retained by the team. Running under the Peugeot Hansen Academy banner, Jeanney will be joined by Kenneth Hansen’s youngest son Kevin, who won the RX Lites Cup support category last season and is a former MSA Junior Rallycross Champion in the UK.

“Davy continues his path as a strong challenger for the 2016 series while Kevin is the youngest competitor in the series and is learning extremely fast,” said Kenneth Hansen.

“I’m looking forward to seeing how quickly Kevin will learn by driving alongside a driver with as much experience as Davy. It’s a great opportunity for him and the entire Peugeot Hansen Academy.”