Fernandez had been tipped as the odd man out in recent days, but now it is in fact Espargaro who has been demoted to a testing role for the Austrian marque and its subsidiary, GasGas.
Acosta enters MotoGP having won the 2021 Moto3 title on his debut and is currently more than 50 points ahead in Moto2, with the rider being a key target for rival manufacturers if he didn't make the jump to the top tier with KTM.
Fernandez has finished a best of fourth this season in France and most recently was seventh in Japan, while Espargaro has had a tough season compounded by injury.
“We had an important and difficult decision to make for our GasGas team for 2024,” said KTM and GasGas Motorsports Director Pit Beirer.
“Augusto has made impressive first steps in MotoGP and we are totally convinced he has the speed and the intelligence to keep on progressing.
“Pedro is a very special talent who has already won so much, so quickly and 2024 will be about him learning to take the next step with the big boys in MotoGP.
“I want to thank Pol for everything he has done and all he continues to do for us.
“This guy is super-tough and super-determined and that's why we want to count on him as an important part of our structure.
“Pol's openness and proactiveness deserves my deepest respect. It underlines his greatness as a person that he gave us a helping hand in this situation. It also shows his passion for the sport and his thoughts for the future.
“With these pieces in place and with Hervé [Poncharal, Tech3 team owner], Nicolas [Goyon, Team Manager], and all the team and their experience we have an exciting year ahead for the GasGas brand.”
KTM had hoped to take over Suzuki's spots on the grid reserved by Dorna for a new manufacturer but could also buy a satellite team and field an MV Augusta-branded squad in 2025 following the Pierer Mobility AG taking a significant stake in the Italian marque last year.
Miller and Binder will to continue to spearhead the KTM factory attack.