The 21-year-old has been sharing the team’s third i20 N car with team-mate Dani Sordo this season and achieved a career-best result of fourth overall at Ypres Rally Belgium in August.
Glimpses of blistering speed have been overshadowed by several trouble-stricken outings, however, with Solberg only managing to finish inside the top six on three out of nine occasions so far in 2022.
His final start was marked at last week's Repco Rally New Zealand, where he finished fifth overall despite nursing an engine misfire during the penultimate leg.
The statement said: "Hyundai Motorsport and Oliver Solberg have announced that the contract between the two parties will not be renewed when it reaches its natural conclusion at the end of 2022. The decision to part ways has been taken following a challenging season for the team.
Solberg, who has completed eight events in the WRC Rally1 category in his debut year at the top level of the sport, registered a best result of fourth in Ypres Rally Belgium. Most recently, he claimed fifth in Rally New Zealand, which was to be his final Rally1 event with the team.
The encouraging performances have come during a season of learning for the young driver, in which he has been a positive and hardworking member of the team.
In an effort to deliver more consistency in its performances, Hyundai Motorsport has outlined its intentions to field an experienced trio of crews for the 2023 season. The team will decide on its complete line-up in due course and make an announcement accordingly."