Following the one-year deal, the Formula One Grand Prix to be held in Bahrain in April 2004 will be called the Gulf Air Bahrain Grand Prix.
The contract also sees Gulf Air become the official airline carrier of the Bahrain Grand Prix.
Commenting on the deal, Gulf Air president and chief executive, James Hogan stated: "Gulf Air is both honoured and delighted to be part of this milestone event in the history of Bahrain and the region. I would like to thank our partners in the Bahrain International Circuit and the Bahrain Motorsport Federation for their support and endorsement during the negotiations leading up to this agreement.
"Over the last year Gulf Air has put its weight behind a number of initiatives designed to boost awareness of and interest in all the things its owner states have to offer, in particular tourism attractions.
"The first Formula One race in the Middle East provides an attraction of the highest order and at the same time, unprecedented opportunities to put Bahrain on the world map."
Gulf Air will be investing extensive marketing resources behind a promotional campaign to support the naming rights deal.
The airline has also announced the first of a series of all-inclusive packages that include flights, accommodation and Grand Prix tickets for spectators from abroad.
Bahrain, the newest venue on the Formula One Grand Prix circuit, has signed a naming rights deal with Gulf Air for the inaugural race.
