Honda announced its buyout of founding owner British American Tobacco's (BAT) 55 percent majority share ahead of this weekend's home grand prix in Suzuka.
Honda will name their new team for 2006 in agreement with future sponsors.
"We began negotiations in the summer to increase our share from 45 percent to full acquisition," Honda's operating officer Hiroshi Oshima told Reuters.
"We want to race as Honda and we want to challenge for the championship. We want to take the team in a better direction."
The BAR Formula One team was bought by a joint venture between engine partners Honda and BAT in January.
BAT owned 55 percent of BARH Limited with Honda holding 45 percent.
BAR were runners-up to Ferrari in the constructors' title last season with drivers Jenson Button of Briton and Japan's Takuma Sato.
