What is velocity in agile and how is it used for planning?

Velocity is the amount of work a team completes in a sprint, measured in story points or other relative estimation units. It is calculated by summing the story points of all completed user stories at the end of each sprint. After several sprints, the team's average velocity becomes a reliable predictor of how much work they can accomplish in future sprints. Velocity is used for release planning by dividing the total remaining story points by average velocity to estimate how many sprints the project will need.