People familiar with the contract said Nextel will pay the sanctioning body about $40million annually with another $30m a year for promoting the series - revenue which places the value of the contract at $700m.
The announcement of the new 10-year sponsorship deal marks the end of a long association between NASCAR and the R.J. Reynolds Tobacco owned brand Winston which has been title sponsor of the US stock car racing series since 1972.
Commented NASCAR chairman Bill France: "Nextel is a partner with a strong brand, a bright future, and a vision for growing our sport.
"They are one of the most technologically advanced and an acknowledged leader in a sector that helps drive the US economy. The serious and substantial commitment Nextel brings to our sport will benefit the fans, drivers, teams, owners and tracks.
Added NASCAR vice chairman and executive vice president Brian France: "This is a perfect fit. Technology is an emerging area of growth for NASCAR and its fans – who have a penchant for using wireless communications. Nextel will be able to promote its association with NASCAR in a variety of media, targeting fans across the country.
"While NASCAR is No.1 in fan brand loyalty, No.2 on television, and No.3 in licensed products sales, our objective is to continue to grow our sport and to expand and diversify our sponsorship base.”
The increasing restrictions on tobacco advertising and marketing have undoubtedly played a part in Winston's decision to withdraw from the NASCAR series.
The acquisition of Nextel signals an increased investment for NASCAR given the additional spend on such marketing campaigns which is permitted for the communications firm.
The loss of Winston will be seen by some as a further step away from NASCAR's roots but team owner Ray Evernham predicts a rosy future for the sport.
"Any time you have a change in something that's been around years, it's not always comfortable. However, cigarettes are something that's part of the past and communications are part of the future."
Nextel will undoubtedly however have some big shoes to fill given Winston's long-standing association with the NASCAR series which has gone from strength to strength in recent years.
Nextel has been officially unveiled as NASCAR's new title sponsor - the telecommunications firm replacing tobacco brand Winston from the start of 2004.
