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Now, he has to find a replacement for the German as team-mate to Lewis Hamilton. And at this late stage of the year, it will be no easy task.
So who will be on Wolff's shortlist and how likely are they to get the seat?
This is the fight many would like to see. Hamilton and Alonso are regarded as the two towering talents of their generation and their intense battle as McLaren team-mates in 2007 was cut short by Alonso falling out with boss Ron Dennis and leaving the team. They ended that year tied on points, one behind world champion Kimi Raikkonen, with four wins each.
Round two would be the biggest box office F1 could hope for, but it is highly unlikely to happen for two reasons: 1) Alonso is under contract to McLaren and even if he has a break clause - which they say he does not - they would not want to let him go; 2) More importantly, Wolff knows that the problems he had with Hamilton and Rosberg would pale compared to the potential difficulties of handling Hamilton and Alonso.
Chances of it happening: 6/10
The Australian was the choice of many observers as the driver of 2016, and Wolff is a big fan. The on-track battle with Hamilton would be intense, but Ricciardo is a laid-back character and would probably be easier to handle off it.
But he is under contract to Red Bull until 2018. Red Bull says they have no intention of letting him go, but if Wolff approached them there is just the possibility that they may consider selling Ricciardo. Why? Because most accept that, long term, Ricciardo and Max Verstappen is not a sustainable line-up - if Red Bull become title contenders their relationship is very likely to become incendiary.
Chances: 6/10
Verstappen is the big rising star of F1. Shaded by Ricciardo over 2016 as a whole, performances such as his stunning drive in the wet in Brazil last month mark him out as a future world champion.
Wolff would be very interested but, like Ricciardo, Verstappen is under contract to Red Bull - in his case to the end of 2019. And Red Bull are even more in love with the Dutchman than they are with Ricciardo.
Chances: 4/10
Vettel's love affair with Ferrari - and vice versa - is long over after a difficult and disappointing season. Relations with team boss Maurizio Arrivabene are frayed - especially since the Italian said the four-time champion should focus more on his driving and needed to "earn" a new contract beyond 2017. And Vettel was unhappy with the decision to split with technical director James Allison in the summer.
Likewise, Ferrari have been confused how, after a year and a half of easily beating team-mate Kimi Raikkonen, Vettel's form slipped in the second half of 2016 - although they might want to read the previous paragraph for an answer.
Vettel has been shopping around for a move and would almost certainly welcome a switch to Mercedes. But there are some problems: 1) his contract runs to the end of 2017 and there is no obvious replacement for Ferrari; 2) he might not fancy going up against Hamilton; 3) Vettel and Hamilton together is almost as much of a recipe for trouble as Hamilton and Alonso.
Chances of it happening: 8/10
Wolff has a long relationship with Bottas as part of his management team and rates him highly. The Finn has impressed in the last four seasons with Williams and would be a low-maintenance choice. He would deliver solid results on track and is calm and would not rock the boat off it.
Next year is the last year of his contract at Williams. The team is not the most flush with cash in the pit lane and Wolff would almost certainly be able to put together an attractive deal - either for a cash payment to release Bottas or a reduction in Williams' engine fee.
But Williams have an 18-year-old rookie in the well-resourced Canadian Lance Stroll in their other car next year and need experience in the lead car. Wolff could offer them Mercedes protege Pascal Wehrlein, who raced for Manor in 2016, in exchange. But would Williams accept? Felipe Nasr, who raced for Sauber in 2016, would also be an option for them, and please F1 boss Bernie Ecclestone, who needs a Brazilian in the sport to satisfy its largest single TV audience.
Chances: 9/10
The German is the obvious choice - he is Mercedes' reserve driver, he has tested for the team several times, and he is a free agent. But he has only one season's race experience, and although he has put in some promising drives, he has had a few shaky ones as well.
Putting him in a race-winning car with Hamilton as his team-mate would be a big ask. And that's without even considering his personality. Insiders say Wehrlein can be difficult and self-centred, and Wolff will be wary of putting such a character alongside Hamilton.
Chances: 8/10
Another Mercedes young driver, Ocon has impressed in his half-season alongside Wehrlein at Manor - so much so that Force India picked him rather than the German as their second driver alongside Sergio Perez for 2017.
But Ocon has only nine races under his belt and it's surely too early for him to get a seat at the factory Mercedes team.
Chances: 7/10
A left-field choice, the Scot has been out of F1 for two years now. But he was Williams reserve driver this year and is a Mercedes-contracted driver in the DTM German Touring Car Championship and would be a solid option.
Chances: 5/10
Button has retired from F1, but remains contracted to McLaren. He made it very clear in the last few weeks that he needed a break from the sport.
Chances: 1/10
The German has just signed a three-year deal with Renault, but the French company and Mercedes have links on a corporate level and Wolff is close friends with their racing boss Frederic Vasseur.
But taking Hulkenberg would leave Renault with a vacancy that would be tough to fill and Wolff is not overly enamoured with him either.
Chances: 2/10
Mercedes Formula 1 boss Toto Wolff admits that Nico Rosberg's decision to retire took him completely by surprise - but it is only the start of his problems.