Mears had a deal with Germain and sponsor Geico through 2018, but a frustrating season with Mears finishing 28th in the standings -- as well as likely significant support from RCR for Dillon, a grandson of RCR owner Richard Childress -- spurred the change.
"I want to thank Casey Mears for everything he's done for our race team over the past six years," team owner Bob Germain said in a statement. "He's been an integral part of our growth and a great representative for Geico and our many partners.
"Bringing Ty on board is an exciting opportunity for us and we are committed to giving him all the resources he needs to reach his full potential. He's a very talented driver and first class young man. I'm looking forward to working with him, as well as expanding our relationship with RCR."
Geico will remain at Germain as Dillon's sponsor and also plans to continue to sponsor Mears, nephew of four-time Indianapolis 500 winner Rick Mears, in select Xfinity Series races next season.
The 24-year-old Dillon, the younger brother of RCR driver Austin Dillon, has 18 career Cup starts with a best of 14th at Michigan in June 2015. Third in the Xfinity Series standings last year, he was fifth in the 2016 points after failing to advance out of the first round of its Chase. He has one win in the Xfinity Series, coming in the 2014 race at Indianapolis.
Having spent three full seasons in Xfinity, it was time for Dillon to make the jump to Cup. There wasn't room or sponsorship for him at the three-car RCR operation -- with Austin Dillon, Paul Menard and Ryan Newman returning with their same primary sponsors in 2017.
Mears, 38, has one win in 488 career starts, with the victory coming in the 2007 Coca-Cola 600 at Charlotte Motor Speedway. He has 13 top-five finishes. He enjoyed his best season points-wise in 2006, his last year driving for Chip Ganassi, when he finished 14th in the standings. He finished 15th the next year driving for Rick Hendrick and 20th in 2008 -- the last time he was top-20 in points.
He joined Germain Racing late in the 2010 season. His best finish in the standings while at Germain was in 2015, when he finished 23rd. His best finishes this season were a pair of 12th-place finishes at Daytona and Watkins Glen.