The Spanish cycling squad had been set for closure after its main sponsor - the Basque telecommunications company Euskaltel – said it was pulling out of the sport because co-sponsors had failed to deliver expected funding.
But in a surprise move, Alonso has agreed to purchase the Basque Pro Cycling Team (BCPT) company that owns the licence to Euskaltel Euskadi. A deal is set to be signed imminently.
The move will secure the future of cycling's oldest team in the international peloton, although it has not been announced whether or not it will be renamed for 2014.
A statement issued by the team said: "Euskaltel wants to thank the double Formula 1 champion for reaching an agreement and would like to emphasise the respect, understanding and love that Fernando Alonso has shown for the Euskaltel Euskadi team, its professionals, its historical legacy and his hobby."
Alonso had generated interest among Formula 1 fans with a cryptic Tweet on Sunday referring to the imminent news of his cycling interest.
"I have important news coming these days ... Stay tuned here on Twitter and on the Web!!!" he wrote.
Spanish reports suggest that Alonso's team will focus its efforts around Samuel Sanchez, the 2008 Beijing Olympic road race gold medallist.