Mercedes will serve up the perfect Christmas gift for one driver by confirming the signing of Nico Rosberg's replacement before the end of the year.

That is the assurance of the team's non-executive chairman Niki Lauda, who conceded the Formula One world champion's surprise retirement had left Mercedes with "a big problem".

Lauda said on Saturday that "half the grid" wanted to take Rosberg's place and revealed the timeline for the team's recruitment process.

"This is a big problem now for us and the team to find the proper replacement," the three-time world champion told BBC 5live. 

"I cannot tell you now [who it will be], because we have to think about it and contact everybody and do proper research on who we are going to put in the best car in Formula One. We have the best car in Formula One, but no driver.

"I need one for the first test in February when the new car is ready, I certainly need a driver then.

"I can assure you it will happen earlier, because whoever it is we need to train him in the simulator and train him into the team.

"I think we should have a decision before the end of the year. Christmas, we give a Christmas present to one of these drivers."