Michael Schumacher has announced his retirement from Formula One, just moments after taking victory in the Italian Grand Prix.

With the seven-times world champion stood atop the Monza podium after scoring the 90th victory of his career, Ferrari released a statement saying that the 37-year-old's career will end this season.

And Schumacher looks increasingly likely to bow out in style, the combination of his victory and the retirement of Fernando Alonso reducing the latter's championship lead to just two points.

With stewards forcing him to start tenth on the grid after he was adjudged to have blocked Schumacher's team-mate Felipe Massa in qualifying, Alonso climbed to third place before his engine failed on lap 44.

"You have to savour the moment and find the right moment," Schumacher said in the post-race press conference. "This will be my last Monza race. At the end of this year I have decided I am going to retire from racing.

"This has been an exceptional time for me. Motorsport has given me some amazing moments.

"I have loved every single moment, the good and the bad ones. Those make life so special.

"To finish in style today has been fantastic."

With Alonso 24 points ahead of Schumacher after June's Canadian Grand Prix, four subsequent victories for the latter have now presented him with the very real chance of bowing out with an eighth title.

And Schumacher promised that his customary commitment behind the wheel will be very much in evidence during his final three races as a Formula One driver.

"I cannot say I will be more focused than ever because I have always been focused on one thing when I am in the car," he continued.

"The championship was difficult in the beginning. Now we are two points behind with three races to go.

"Nobody would have thought at Canada that we would have been in that position.

"We have had some luck but we are 100% focused for the constructor and drivers' championships."

On a day of Ferrari announcements, the team later confirmed that Kimi Raikkonen, who finished runner-up to Schumacher at Monza, would be his replacement alongside Felipe Massa.

Raikkonen, who currently drives for McLaren, has signed a three-year deal at Maranello, with Massa extending his own contract until the end of 2008.

The Finn qualified on pole position ahead of Schumacher and narrowly led the race for the opening 15 laps before making his first pit stop.

However after making his own stop one lap later, Schumacher rejoined ahead of Raikkonen, with the pair retaining position through to the chequered flag.

Meanwhile Alonso had climbed to sixth place at the start of lap two but failed to progress much further until his second pit stop on lap 42.

Renault used the stop to lift Alonso ahead of both BMW Sauber's Robert Kubica and Massa into third place - Alonso taking the Pole as the pair raced side-by-side from the pitlane.

But Alonso's hopes of damage limitation disappeared in a plume of smoke on lap 44, his Renault's engine having failed on the start-finish straight.

As the Spaniard trudged back to the pits with the cheers of Ferrari fans ringing in his ears, Massa was making an enforced pit stop - his Ferrari suffering a delaminated tyre as he avoided oil thrown on the track by Alonso.

Massa eventually finished ninth, with the impressive Kubica - who led the race for six laps after Raikkonen and Schumacher pitted - inheriting Alonso's podium place in only his third grand prix.

Giancarlo Fisichella one-stopped his way to fourth, ahead of a down-on-power Jenson Button and Honda team-mate Rubens Barrichello.

Toyota's Jarno Trulli finished seventh ahead of BMW Sauber's Nick Heidfeld.