The Swiss was already the favourite to secure one of the seats after having tested for Toro Rosso for several days during the winter.
The 20-year-old from Aigle is part of Red Bull's junior driver programme and last year competed in GP2.
"We are delighted to welcome Sebastien, who was already part of the Red Bull family, to our team," said team boss Franz Tost. "Our engineers have been impressed with his speed in the car and his ability to learn and progress during the testing he has carried out for us last year.
"That, along with some impressive performances in GP2 was enough to convince us to give him the drive. His appointment also fulfils the aims of the Red Bull Junior Driver programme and meets Dietrich Mateschitz's intention to use Scuderia Toro Rosso as a showcase for young drivers the company has supported in the lower formulae."
Buemi will make his debut as an official Toro Rosso driver in the test to be held at the Portimao circuit in Portugal later this month.
"I am naturally very happy to be driving for Scuderia Toro Rosso this year," said Buemi. "Being a Formula One driver has always been my target, since I first started racing.
"This year, I will do all I can to bring home the best possible results and to show Red Bull that the confidence it has shown in me is justified. I want to thank Red Bull for this opportunity and for all the help they have given me in my career, dating back to 2005."
Toro Rosso said Buemi's teammate would be announced in due time.
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