"We're very proud to be announcing this race in 2020," Carey told reporters in Hanoi as details of the event were unveiled.
Carey said the decision to hold the race in Hanoi was part of Formula One's strategy to move into markets where it hopes to groom a new generation of fans -- and boost revenues.
"We plan for this to be a long-term agreement, and we intend for this to be a long-term partnership," he added.
"The race is also an important part of our broader strategy to grow our sport in Asia, and clearly Vietnam is a driving force for the growth in Asia."
Hanoi municipal government chairman Nguyen Duc Chung said the contract signed was for 10 years, with an opportunity to start discussing extensions in year eight.
The 5.6 kilometre (3.5 mile) track will include existing roads and portions that have yet to be built, according to a press release from the Hanoi Municipal People's Committee.
The day race will be held near the national stadium, after initially considering hosting it near Hoan Kiem lake near Hanoi's chaotic Old Quarter.