It seems to be only 1-year contract.
This angle is covered on the BBC page (excerpt below). It does make sense, really, when you think about it.
But I would expect him to continue with Mercedes in 2022 - after winning the 2021 title
2021 will likely be a Mercedes procession, but 2022 is a reset for the whole field, and should result in closer racing with more teams being competitive. Hamilton has complained in the past about not having real close competitors, it's something he seems to relish - as I'm sure all racers would - and he'd surely be eager to test himself against rivals on a more level playing field rather than simply retire.
Why only a year?
Team boss Toto Wolff said the duration of the contract was a consequence of the lateness of the talks, which was caused by them having to delay negotiations when Hamilton contracted Covid in December, and their mutual desire to "see how the world develops".
There is the uncertainty caused by the pandemic, as well as by a number of major rule changes in F1, including a budget cap that starts this year at $145m (£114m) and new technical rules for 2022 aimed at closing up the field.
Wolff said the global situation could have an impact on the team's revenue, while Daimler as a group is having to invest in electrification, adding: "We are living a financial reality that is very different from a few years ago."
He added: "We are totally in line - Lewis and me and the wider group in Mercedes - about the situation, so there was never a discrepancy in opinion.
"It was just we felt that we had a good signature on a 2021 contract and we needed to get going and then find some time in 2021 earlier than this time to discuss the future.
"And it's not to discuss only 2022 but also beyond, and that was not something we wanted to carve out via video conferencing between Christmas and the end of January."
It means a lot to me that I expect a much better performance from both Red Bull drivers now. Perez is one of the drivers I like the most on the grid. He did a very good job at Racing Point last season. We can also see a good competition between Perez and Verstappen. 
