Downton - who are currently struggling in the Championship - also unveiled their new logo for next season (shown left).
Downton were expected to run their two young drivers - Kip Maxwell and Marcus Thunder - again next season after Scott Parsons suffered a horrific accident while rallying earlier this season. However the signing of Powers surely means one of them will have to work as a test driver for the season.
In a statement the team said: 'We are delighted to be welcoming Nathan to the team for next season. He is a world-class driver - as he is showing this season at the moment by leading the Championship by such a huge margin - and we hope he can continue this form next season and help us develop the car and become Champions.
Powers also commented: 'To be joining Downton is a fantastic opportunity. Franklin has treated me fantastically this season and I would like to thank them hugely for the opportunity they gave me - it is time to move on however. Downton have a brilliant package for next season and the whole idea they are aiming for is a brilliant idea. Their ambition is to become a fully fledged manufacturer in their own right - producing their own cars and their own engines. I am delighted to a part of this.'
When questioned on the driver line-up for next season Downton commented: 'We are currently unsure who will partner Nathaniel next season but it will be between Marcus and Kip. It could come down simply to whoever performs better in the Championship this season.'