Amid the almost three-week mystery about the whereabouts of the plane and its 239 occupants, Britain's Mirror newspaper claims Mercedes planned to run 'Come Home MH370' signage on its W05 cars throughout the grand prix weekend.
But earlier this week, the Malaysian prime minister finally announced that the plane had crashed somewhere in the southern Indian ocean, killing all on board.
DPA news agency now reports that Mercedes, title sponsored by the Malaysian oil giant Petronas, will run the words 'Tribute to MH370' on the cars at Sepang.
Petronas said race weekend concerts featuring pop star Christina Aguilera have been cancelled as "a sign of respect to the families and next-of-kin of the crew and passengers of flight MH370".
"It is truly a tragedy and we are deeply saddened about the crew and passengers," Petronas said in a statement.
The similarly Petronas-sponsored grand prix, however, is going ahead.
"The atmosphere is subdued and I understand everyone is talking about it everywhere and asking why we are hosting an F1 race under the circumstances," said Sepang circuit boss Razlan Razali.
"But it is something that was decided a long time ago."
Also set to go ahead in Kuala Lumpur is the 2014 edition of the Laureus world sports awards, to be attended by nominee Sebastian Vettel on Wednesday.
Laureus chairman Edwin Moses said: "We feel the appropriate action at this time is to scale down some of our activities over the next two days."
It is also believed F1 officials will meet ahead of the race weekend to organise a suitable tribute for the victims of the ill-fated flight.
Elsewhere, 62 per cent of those surveyed by the German news agency SID said F1's governing body should cancel the inaugural Russian grand prix over the Crimean crisis.