Mercedes’ non-executive Chairman, Niki Lauda, wants to “give a Christmas present” to a driver after the shock retirement of world champion Nico Rosberg on Friday.
Team boss Toto Wolff said the search would start today (Monday), with a decision expected by the end of 2016.
“It is a huge loss because we had the quickest driver set-up over the last three years,” Lauda told Sportsweek.
“I need a driver for the first test in February when the new car is ready.”
He added: “We have to train him on the simulator and into the team, so we should have a decision before the end of the year.”
Rosberg retired five days after beating British team-mate Lewis Hamilton to clinch his first world title.
Hamilton, a three-time world champion, has said he “doesn’t care” who is picked as the German’s replacement.
Speaking on BBC Radio 5 live, Lauda added: “Nico and Lewis were pushing each other. Lewis won two championships and Nico won one. Now we have to find a better man than Nico because we want to continue to win.
“This is a big problem for us to find a replacement, so I cannot tell you now because we have to think about it, contact everybody and make proper research into who we are going to put in the best car in Formula 1.
“We have the best car to offer but at the moment no driver. The other drivers, or the majority certainly, have 1 December contracts for next year so really we have to do good research, who is there, what and when and then we will take a decision, but it will take a while.”
Lauda retired from F1 in 1979 before coming back to win the 1984 World Championship. He quit the sport as a driver on a permanent basis a year later.
Asked about Rosberg’s decision to retire, he said: “I was really surprised – this was never on my radar that this could happen.
“I spoke to him afterwards to find out because I did this twice in my career and I really wanted to make sure it was not a quick decision which he might regret and I wanted to find out how sure he is.
“Of my question ‘how sure are you?’ he said ‘1,000%’. Then I knew that it is over – you cannot convince him any more.”