By Alan Baldwin

BUDAPEST, July 28 (Reuters) - Sauber have signed a multi-year agreement to continue using Ferrari engines after this season, the Swiss Formula One team said on Friday.

The announcement came a day after the team and Honda cancelled a planned partnership from 2018. urn:newsml:reuters.com:*:nL5N1KI86L

"The shared experience between the Sauber F1 Team and Ferrari has built a strong foundation, which will allow us to move forward swiftly and efficiently, also in terms of the development of the 2018 car," said team principal Frederic Vasseur in a statement.

Sauber are currently using a 2016 specification Ferrari power unit but Vasseur told reporters at the Hungarian Grand Prix that the team needed to have the latest version next season.

The move casts doubt on the future of the team's line-up, with Germany's Pascal Wehrlein a Mercedes-backed driver while Ferrari have in the past placed some of their own academy youngsters with Sauber.

Ferrari-backed Monegasque Charles Leclerc is leading the Formula Two series while Ferrari's Italian reserve driver Antonio Giovinazzi replaced the injured Wehrlein for two races earlier this season.

Sauber's plans to link up with Honda fell apart after the departure of former principal Monisha Kaltenborn in June.

Ferrari also provide the U.S.-owned Haas team with engines, as well as their own works outfit.

Mercedes, Renault and Honda are the other manufacturers supplying engines to the F1 grid.

Sauber have used Ferrari engines since 2010, after BMW withdrew from the sport. They also used the Italian-made units between 1997 and 2005, under Petronas branding.

(Reporting by Alan Baldwin, editing by Amlan Chakraborty) ((alan.baldwin@thomsonreuters.com; +442075427933; Reuters Messaging: Reuters Messaging: alan.baldwin.reuters.com@thomsonreuters.net))