Verstappen, 21, has won two of 12 races this term to lie third on 181 points.
Two race victories and countless podiums has seen major improvements on one side of the garage.
Being measured against Verstappen will, however, be a tough challenge, with the sport's youngest race victor seen as a champion-in-waiting.
An error plagued season, including a DNF in Germany and frequent midfield finishes, has been enough for Gasly's early dismissal. He has been outqualified by his team-mate Verstappen at every race except the Canadian GP, where Verstappen was put out in Q2 by a red flag, and has finished behind the Dutchman at every race except Silverstone, where Verstappen was crashed into by Sebastian Vettel.
"Everyone at the Team looks forward to welcoming Alex and supporting him during the next phase of his F1 career".
Red Bull's motorsport advisor Helmut Marko had ruled out the prospect of replacing Gasly mid-season in response to speculation over his long-term future. He has scored 81 points in the last four races alone.
Then, it seemed like he would move further away from F1, when he was recruited by the Nissan Formula E team.
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They were receiving the necessary medical treatment in specialised facilities, it said. The Defence Ministry has said back then that two people were killed in the accident .
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"Alexander Albon is being promoted to the team to drive alongside Max, while Pierre will return to the Red Bull sister team, Scuderia Toro Rosso", the statement read.
It's fair to say the Frenchman underwhelmed in the opening stages of this season, but you have to fear that Red Bull may have the same situation come around next season.
On Instagram, Alex Albon wrote, "Surreal to have been given this massive opportunity with Red Bull Racing!".
"It has been a frustrating weekend for Pierre", said Christian Horner after the Hungarian Grand Prix.
"The problem is he is not in the mix at all", he said. Now he's in a front-running team with an opportunity to prove himself amongst the elite. The 23-year old has piloted that team's Honda-powered cars with aplomb, finishing sixth in the wet at the German Grand Prix in late July, and he has amassed 16 points in a lesser auto compared to the Aston Martin cars.
Rookie Albon only began his F1 career in March.