Formula One's governing body, the FIA, on Monday backed a bid by American Michael Andretti, son of 1978 world champion Mario, to enter a new 11th team subject to approval by the commercial rights holders.
The International Automobile Federation (FIA) said in a statement that Andretti Formula Racing LLC should progress to the next stage of the application process and commercial discussions with Formula One Management.
Liberty Media-owned Formula One said separately it would carry out its own assessment.
The FIA started a formal application process in February, seeking to identify one or more new teams interested in joining in 2025, 2026 or 2027.
"The FIA is obliged to approve applications that comply with the Expressions of Interests application requirements and we have adhered to that procedure in deciding that Andretti Formula Racing LLC's application would proceed to the next stage of the application process," said FIA president Mohammed Ben Sulayem.
"In taking that decision, the FIA is acting in accordance with EU directives on motor sport participation and development," he added.
"Andretti Formula Racing LLC was the only entity which fulfils the selection criteria that was set in all material respects. I congratulate Michael Andretti and his team on a thorough submission."
Andretti's Andretti Global and General Motors announced in January that they planned to compete using the Cadillac brand and employing at least one U.S. driver.
Renault-owned Alpine have said they will supply the engines if the Andretti Cadillac team wins approval from the FIA and commercial rights holder.
Other Formula One teams have been lukewarm towards expanding the grid, wary of diluting the overall pot of revenues.
Some also feel the current $200-million entry fee, which would be shared among the existing 10 teams as compensation, is not enough.